Global equities are entering one of the busiest weeks of the year with some momentum. The Dow Jones Industrial Average added 146.42 points, or 0.28%, on Monday to finish at 52,361.58, while the S&P 500 gained 0.7% to 7,676.77 and the Nasdaq Composite rose 0.82% to 26,169.38. The S&P 500 more than recovered last week’s losses and now sits within 1.8% of the record it set earlier this month.
Asia leads with chip stocks
The rally carried into Asia on Tuesday, with technology hardware makers doing most of the work. South Korea’s Kospi jumped more than 4% at one point and was up 3.6% at 5,667.99 by midday, helped by a 7% rise in SK Hynix and a 4.8% gain in Samsung Electronics. Tokyo’s Nikkei 225 climbed 2.2% to 63,542.77, with Advantest up more than 10% and SoftBank Group up 7%.
Not every market followed. Hong Kong’s Hang Seng slipped 0.2% to 23,174.44 and the Shanghai Composite eased 0.1%, with traders waiting for any announcements from a closed-door meeting of China’s ruling Communist Party. Australia’s S&P/ASX 200 added 0.3%.
All eyes on the Fed
The main event arrives on Wednesday. The Federal Reserve begins a two-day policy meeting on Tuesday, and traders are largely expecting rates to stay unchanged while looking for hints on whether another increase could come before the end of the year. Futures pricing suggests a roughly 90% chance that policymakers hold the target range at 3.75% to 4%.
The debate is about what happens next. Russell Investments’ global chief investment strategist expects a hawkish hold in October, followed by one more rate rise at the end of the year, citing solid growth, strong earnings and resilient consumer spending. Other market participants say the key question is whether the central bank prepares the ground for a December increase. The European Central Bank and the Bank of Japan announce their own rate decisions on Thursday and Friday.
A crowded earnings calendar
Corporate results will compete for attention. A total of 163 S&P 500 companies are due to report third-quarter results this week, including several of the largest technology groups. Alphabet and Microsoft report on Wednesday, followed by Amazon on Thursday, putting spending on computing infrastructure and cloud growth back under scrutiny. On Tuesday, Coca-Cola, Robinhood and Boeing are among those posting numbers.
So far the season has been strong. According to FactSet data, 83% of S&P 500 companies that have reported beat earnings expectations and 66% topped revenue forecasts, with blended earnings growth seen at 29.5%.
Reasons for caution
Even so, analysts see risks beneath the surface. One note pointed out that just two companies, Nvidia and Micron, are expected to account for more than a third of the S&P 500’s projected profit growth, so disappointment from either could weigh on the whole index. Another analyst highlighted weak breadth, with only about 38% of S&P 500 companies outperforming the index over the past year, and noted that Meta fell 9.4% last week after its results.
Geopolitics and energy are part of the picture too. Oil prices dipped on Tuesday after Saudi, Turkish and Pakistani officials held talks in Tehran, though Brent remained near $115. The 10-year US Treasury yield was around 4.99% at the start of the week, a level that keeps pressure on valuations, particularly for growth stocks.
Investor sentiment around artificial intelligence has also been shaping trading. A high-profile public listing filing by one AI developer helped revive enthusiasm for the sector on Monday, while falling oil eased some worries.
