WOLF - US Stocks Set To Bounce Back Strongly From Oversold Levels As Earnings Fed Decision Take The Spotlight | Benzinga
US stocks are on track to start the new week on an upbeat note as more earnings and the Federal Reserve’s rate decision loom. The oversold levels of the market could attract buying if the other catalysts prove to be benign.
The Fed is widely expected to announce a pause decision on Wednesday, with the futures market pricing in a 98.6% probability of a status quo stance. The market participants will likely focus on the post-meeting policy statement and Fed Chair Jerome Powell’s commentary in the following press conference.
Earnings continue to drop in, with some key reports, including from Apple, Inc. (NASDAQ:AAPL) and chipmakers Qualcomm, Inc. (NASDAQ:QCOM) and Advanced Micro Devices, Inc. (NASDAQ:AMD), likely to take center stage.
Cues From Past Week’s Trading
Mixed earnings and some strong economic data that kept bond yields elevated pressured stocks in the week ended Oct. 27. Expectations that the Fed may not have been done with its rate hikes prompted traders to prefer bonds, which are considered a relatively safer investment option than equities.
The Dow Industrials ended at its lowest level since late March, and the S&P 500 Index closed at a fresh five-month low and is now in deep correction territory. The tech-heavy Nasdaq Composite Index finished just off a five-month low.
The Russell 2,000 Index, which represents small-cap names, pulled back toward to nearly a two-year low.
The Dow Industrials and the S&P 500 Index were down for a second straight week, while the Nasdaq Composite has posted weekly declines in each of the past three weeks.
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