Stocks rose sharply on Monday as investors weighed key earnings reports after a wild week of trading.
The Dow Jones Industrial Average gained 500 points, or 1.7%. The S&P 500 rose 2.5% and the tech-heavy Nasdaq Composite rose 3.2%.
The S&P 500 just came off its fourth negative week in five with a 1.6% loss last week. A higher-than-expected inflation reading sparked wild price swings in markets as investors readjusted their expectations for the Federal Reserve’s upcoming rate hikes.
The big swings led the market to set new lows for the year, although some believe there are technical reasons for the market to see near-term relief.
“The 200-week moving average is a serious floor of support until companies fully confess or a recession officially arrives, which could take several more months and lead to a near-term technical rally,” said Mike Wilson of Morgan Stanley in a note to customers.
Monday’s moves came as the British pound rose on further policy changes from the UK government. The UK’s new Chancellor of the Exchequer, Jeremy Hunt, announced that almost all planned tax cuts would be scrapped. The pound traded 1% higher at $1.127 per US dollar.
Meanwhile, Q3 earnings season is in full swing. Investors are monitoring whether US companies will have significant downward revisions to their outlook in the face of stubbornly high inflation and a slowing economy.
Bank of America reported better-than-expected results on Monday, sending shares up nearly 5%. Bank of New York Mellon also posted results that beat analysts’ expectations, and its shares rose more than 5%.
Lots of notable tech names are also reporting this week, including Netflix, Tesla, and IBM. Johnson & Johnson, United Airlines, AT&T, Verizon and Procter & Gamble are other big companies on investors’ radar.