By Antonio Ernesto Di Giacomo

The Wall Street market closed with gains on Monday, October 14, 2024, driven by the performance of technology stocks, leading the S&P 500 and the Dow Jones to reach new all-time highs. This increase occurred ahead of an important week for the markets, as corporate earnings reports and economic data are expected, which could influence investor behavior. Despite the low trading volume due to the bond market being closed for a federal holiday, positive sentiment persisted, pushing the Dow Jones to historic highs, surpassing 43,000 points.

Technology stocks were Wall Street’s main drivers of gains, with semiconductor companies like Arm Holdings and Nvidia standing out in the market. The information technology sector of the S&P 500 rose by 1.4%, contributing significantly to the index’s overall gains. The Nasdaq also closed with gains, while the Dow Jones, despite declines in companies such as Caterpillar and Boeing, managed to rise by more than 20 points, demonstrating the market’s resilience.

However, despite this optimism, stock valuations remain high, which could challenge companies when presenting their financial results. Analysts anticipate a year-over-year growth of 4.9% in S&P 500 earnings for the third quarter, but there is some uncertainty about whether companies will meet these high expectations. This factor could lead to market volatility if the results fall short of expectations.

In addition to earnings reports, investors will watch economic data released weekly. A key aspect will be the retail sales figures for September 2024, as they could provide insight into the health of the U.S. economy and consumer behavior. These data and other economic reports will be crucial for the Federal Reserve’s future decisions regarding interest rates, which have strongly influenced market volatility in recent months.

In conclusion, Wall Street has shown positive performance driven by technology stocks, reaching new all-time highs. However, attention is focused on the upcoming earnings reports and economic data, which will be crucial for the market’s future direction. The high stock valuations and the possibility of interest rate adjustments by the Federal Reserve keep uncertainty in the air, so investors will closely monitor this week’s results to make informed decisions.

• Di Giacomo – Senior Market Analyst at XS.com