Monday was the latest in a long line of wild swings in the stock market. Many large financial firms reported earnings that were better than expected.
This month, there have been more days with significant changes in the stock market. The S&P 500 went down more than 2% on Friday after going up more than 2% on Thursday. But by the end of the day, it was up 2.7%.
The 11 industries that make up the S&P 500, such as technology, energy, and real estate, went up. This month, the benchmark index has changed by more than 2% in six days, while it only did twice in September.
Since the beginning of the year, the S&P 500 has lost more than 22% of its value.
Bank of America, the second-largest bank in the US, posted quarterly results that were better than expected. After Britain announced that Prime Minister Liz Truss’ tax plan, which had scared the markets, would be changed, the needs changed significantly.
In line with what other big banks said about their results at the end of the previous week, Bank of America emphasized how strong consumer spending is still. The price of Bank of America stock went up by 6%. Also, Charles Schwab and the Bank of New York Mellon said their earnings were better than expected.
Investors are keeping a close eye on the earnings reports of companies this quarter to see if big companies are already feeling the effects of a slowing economy.
This week, companies like American Airlines, Goldman Sachs, and Procter & Gamble will release their financial information. This will make investors worried about the economy’s direction updates and estimates.
A senior iShares strategist at BlackRock, Kristy Akullian, says that the recent significant changes in stock prices aren’t usually caused by changes in fundamentals, like a good earnings report. She also said that a “technical factor” was behind the bigger-than-usual changes.
We’re seeing that it goes up a lot whenever the market goes up, even a little bit. On other markets, the price of West Texas Intermediate, which is the standard for crude oil in the United States, went down by 0.3% to $85 per barrel.
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The price of Brent crude, used as a standard, went down by 0.1% to almost $92 per barrel.
After Jeremy Hunt, the newly appointed chancellor of the Exchequer, said on Monday that Truss’s plan for tax cuts paid for by more borrowing would be changed again, the FTSE 100 in London went up by 0.9%, the British pound went up, and the yields on British government bonds went down.
“It’s not fair to borrow money to pay for this tax cut when the markets expect promises of stable public finances,” Hunt said. This week, data showed that US inflation did not go down as much as economists had predicted.
This means that the Federal Reserve is likely to raise interest rates again by a significant amount at its next meeting in November. This possibility and a study that showed a rise in consumer expectations for future inflation have both hurt the markets.
Akullian said, “We think that this volatility will go on.” Until we have a better idea of what the Fed will be able to do, which might not happen until the end of the year or even later.