US stocks drop, but notch best October ever as investors weigh upcoming rate hike against upbeat earnings results

• US stocks fell barely on Monday as investors anticipate one other outsized curiosity rate hike from the Fed this week.
• Fed Chair Jerome Powell is predicted to hike charges by one other 75 foundation factors at its FOMC assembly on Wednesday.
• The Dow Jones notched its best month of October on file, rising 14% as third-quarter earnings got here in stable.

US stocks fell on Monday but the Dow Jones Industrial Average set information as investors weigh an imminent rate hike from the Federal Reserve against stable third-quarter earnings results.

Fed Chairman Jerome Powell is predicted to introduced that the US central financial institution will elevate charges by 75 foundation factors at its upcoming FOMC assembly in its bid to tame inflation that has been pushed by larger wages, providers costs, and commodity costs. After this Wednesday’s assembly, the Fed is predicted to hike rates of interest by not less than 50 foundation factors in December.

Aside from extra rate hikes, investors proceed to give attention to third-quarter earnings results, which have largely crushed expectations. So far, 52% of S&P 500 firms have reported results, and of these firms, 72% topped revenue estimates by a median of 5%, in accordance with information from Fundstrat.

The Dow Jones Industrial Average notched its best October on file, rising about 14% and exceeding the prior file of 10.6%. The sturdy month-to-month achieve additionally represented the Dow Jones’ best total month since 1976.

Here’s the place US indexes stood on the 4:00 p.m. ET shut on Monday:

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• S&P 500: 3,871.98, down 0.75%
• Dow Jones Industrial Average: 32,732.95, down 0.39% (128.85 factors)
• Nasdaq Composite: 10,988.15, down 1.03%

Here’s what else occurred at this time:

• Investors shouldn’t expect the Fed to pivot away from curiosity rate hikes earlier than the beginning of 2023, in accordance with a observe from Barclays. 
• But Morgan Stanley’s Mike Wilson disagrees with Barclays’ assessment, arguing in a observe on Monday that the Fed might pivot prior to anticipated, which might assist increase the S&P 500 one other 6% to 4,150. 
• Despite the sturdy rally in stocks this month, GMO’s Jeremy Grantham is not convinced and still expects big downside forward. The investor advised the Wall Street Journal that holding money stays a good suggestion.
• Former Goldman Sachs CEO Lloyd Blankfein took the opposite side of Grantham’s view, arguing that issues aren’t as dangerous as they appear for the inventory market.
• Famed short-seller Jim Chanos warned that Tesla inventory is pricing in outlandish expectations, and that CEO Elon Musk is distracted by operating Twitter.
• Wheat futures jumped as much as 8% on Monday after Russia’s withdrawal from a deal to export Ukrainian grain by way of the Black Sea threatened world meals provides.

In commodities, bonds and crypto:

• West Texas Intermediate crude oil fell 2.15% to $86.01 per barrel. Brent crude, oil’s worldwide benchmark, fell 3.53% to $92.39.
• Gold dipped 0.57% to $1,635.40 per ounce.
• The yield on the 10-year Treasury rose 5 foundation factors to 4.07%.
• Bitcoin ticked down 0.68% to $20,388, whereas ether slipped 1.19% to $1,565.