The S&P 500 (^GSPC) rose 0.6%, while the Dow Jones Industrial Average (^DJI) gained 335 points, or about 1%. Technology heavyweight Nasdaq Composite ( ^IXIC ) rose 0.5% after swinging in afternoon trade. It was the third straight day of gains for the major indexes ahead of another week of potential market-moving events: corporate earnings, midterm elections and inflation data. Investors are focused on Tuesday’s midterm elections that will determine control of the House and Senate for the remainder of President Joe Biden’s first term. Historically, Wall Street has favored a divided Congress or White House, with political gridlock that could block major policy changes, an outcome investors see as favorable to stocks. According to JPMorgan’s latest client survey, 39% of respondents were split on whether the US midterm elections will be a positive catalyst for risk markets or not, while 21% expected a negative impact. Regardless of the winner, some strategists argue that the medium-term results have “modest” influence on financial markets. “The overall near-term implications of the 2022 US midterm elections are fairly modest for FX markets,” Meera Chandan, FX strategist at JPMorgan, wrote in a note to clients. “Therefore, markets should continue to be guided more by the Fed’s monetary policy decisions than by any new major fiscal packages. A wildcard worth noting is the risk of renewed uncertainty around the debt ceiling.” NEW YORK, NEW YORK – SEPTEMBER 13: Traders work on the floor of the New York Stock Exchange during afternoon trading on September 13, 2022 in New York City. (Photo by Michael M. Santiago/Getty Images) Another closely watched item this week will be Thursday’s release of October inflation data. Economists polled by Bloomberg expected the core CPI to be at an annual rate of 7.9%, up from 8.2% last month. Even if the report shows that prices are starting to moderate, the core CPI is well above the Fed’s comfort zone. “The problem is going to be that month-to-month, I think we’re going to continue to see a pretty strong core CPI,” Franklin Templeton Fixed Income CIO Sonal Desai said on Yahoo Finance Live on Monday. “And I don’t think that combination, along with the relatively strong jobs numbers we got on Friday, is going to give the Fed a lot of comfort in terms of changing the course that Chairman Powell laid out last week.” The story continues Some Wall Street banks, including UBS, expect the US to be headed for a “hard landing”. Indeed, Federal Reserve Chairman Jerome Powell said last week that the path to a “soft landing” has narrowed because the Fed has not seen inflation fall. “The US economic expansion already looked precarious. Following one of the fastest recalibrations of monetary policy in several decades, the full effects remain to be seen,” wrote Jonathan Pingle, managing director and chief US economist at UBS, in its Global Economics & Markets Outlook 2023-2024 report. bank. “With significant imbalances remaining in the US economy as a result of the pandemic, we expect 2023 to bring an economic recession or correction. The good news is the resolution of tensions we believe sets the US economy after 2023 up for better years ahead,” he added. Meanwhile, in a new note from Goldman Sachs, chief economist Jan Hatzius put the chance of a US recession in the next 12 months at 35% amid aggressive central bank tightening moves. “We still see a very plausible, non-recessionary four-step path from the high-inflation economy of today to a low-inflation economy of the future,” Hadzios wrote in the note. Corporate earnings reports also continued to fluctuate on Tuesday. Highlights include:
Planet Fitness ( PLNT ): The gym posted third-quarter earnings and revenue that beat expectations and raised its full-year growth outlook as membership hit a record on a return to pre-pandemic seasonal trends. DuPont de Nemours (DD): The chemical giant set a pace for third-quarter earnings and reaffirmed its full-year guidance. Norwegian Cruise Line Holdings Ltd. (NCLH): The cruise line operator reported a smaller-than-expected third-quarter revenue loss that beat forecasts and as an adjusted earnings measure reached profitability for the first time since the start of the pandemic. Lordstown Motors Corp. (RIDE): The electric vehicle maker posted a bigger-than-expected third-quarter loss on Tuesday. But shares gained momentum after iPhone maker Foxconn said it would invest up to $170 million in the startup through the purchase of preferred stock and 18.3 percent of common stock, according to a statement late Monday.
Disney ( DIS ), AMC Entertainment Holdings ( AMC ), Affirm Holdings ( AFRM ), and Lucid Group, Inc. (LCID) are set to report earnings after the bell on Tuesday. In corporate news, Kohl’s announced that CEO Michelle Gass is leaving following a reshuffle of Kohl’s leadership to become CEO of Levi Strauss & Co. Shares of Lyft fell 25% after the ride-sharing company said its revenue growth was slowing and the number of people using the service remained below pre-pandemic levels. Elsewhere, cryptocurrencies are trading lower as Binance, the world’s largest cryptocurrency exchange, has struck a deal with Sam Bankman-Fried’s FTX to buy the cryptocurrency exchange for an undisclosed amount. The total crypto market capitalization fell by 57% from $2.18 trillion to $936 billion. Overseas, Chinese stocks gained momentum after last week’s bets on reopening rumors sparked a rally. According to the Wall Street Journal, Beijing is considering relaxing its zero-Covid-19 policies, but is proceeding cautiously and has no set timeline. In bond markets, the yield on the 10-year note was around 4.2% on Tuesday. In oil markets, meanwhile, Brent crude, the international benchmark, weakened for a second day, falling to $97.71 a barrel. The US dollar index eased slightly after its biggest decline in the past three sessions since 2020. — Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv Click here for the latest stock market news and in-depth analysis, including the events that move stocks Read the latest financial and business news from Yahoo Finance Download the Yahoo Finance app for Apple or Android Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn and YouTube
