October might be known for historically terrifying stock market crashes like those in 1929, 1987 and 2008. But so far this month, Wall Street investors have nothing to fear. Stocks posted another solid rally on Monday, continuing a hot streak for the markets this month.
The Dow was up more than 475 points, or 1.6%, in late afternoon trading. The Dow has now gained nearly 10% this month, recovering from steep declines in August and September.
The blue-chip manufacturers, which include Apple (AAPL), Microsoft (MSFT), Coca-Cola (KO), McDonald’s (MCD), Disney (DIS) and 25 other giants of the US economy, are still down about 13% this year. although.
But the market has rallied this month on hopes that the Federal Reserve will soon take a break from a series of aggressive interest rate hikes to fight inflation. At the Fed’s next meeting on November 2, as well as in December, even larger rate increases are expected. Still, some hope the Fed could take a break in 2023.
Mostly solid third-quarter earnings are also helping lift the stock.
The S&P 500 rose 1.3% on Monday, with the Nasdaq also up about 0.7%. Both indexes also posted decent gains for October, with the Nasdaq up more than 3% and the S&P up 6%. However, the S&P and Nasdaq are still down more than 20% in 2022, meaning they are in a bear market.
The Nasdaq was higher on Monday despite the fact that shares of several of China’s top US-traded technology stocks fell on fears of continued repression by China now that Xi Jinping has secured a third term as the nation’s leader.
E-commerce company Pinduoduo ( PDD ) fell more than 25%. Electric car companies Nio ( NIO ), Xpev and Li Auto posted double-digit percentage losses. So are shares of top Chinese tech companies Alibaba ( BABA ), Baidu ( BIDU ), and Tencent ( TCEHY ).
U.S. companies with significant exposure to the Chinese market were also hit hard and stunted the growth of the broader market.
Tesla (TSLA) fell 2%. Starbucks ( SBUX ) fell 6%. Fast food giant Yum! Brands ( YUM ) fell 2%, while Yum China ( YUMC ), which franchises the KFC, Pizza Hut and Taco Bell brands in China, fell 14%.
Casino owners Wynn Resorts ( WYNN ) and Las Vegas Sands ( LVS ), both of which have properties in China’s Macao Special Administrative Region, also failed.