US stock market: Wall Street ends sharply higher, powered by earnings momentum; Fed eyed
All three major U.S. stock indexes closed up more than 1%, bouncing back from the previous week's sell-off.
Interest rate sensitive megacap stocks, led by Microsoft Corp, Amazon.com, and Apple Inc provided the most upside muscle.
«Today is an earnings rebound,» said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York. «The market got oversold, and the reality is that earnings have been pretty good, the U.S.
economy continues to chug along, and is likely to do so in the fourth quarter and into the first part of next year.»
Third-quarter earnings season, firing on all cylinders, has reached its halfway point, with 251 of the companies in the S&P 500 having reported. Of those, 78% have beaten Wall Street estimates, according to LSEG.
Analysts now expect, on aggregate, annual third quarter S&P 500 earnings growth of 4.3%, a marked improvement over the 1.6% year-on-year growth seen at the beginning of October.
Investors have shown «less pessimism,» Pursche added.
«First- and second-quarter calls had a more negative tone. There was anxiety over interest rates, Fed policy, the recession that never came.»
In the coming week, Caterpillar Inc, Apple Inc, Pfizer Inc and Starbucks Corp are among the higher profile companies expected to post results.
On Tuesday, the Federal Open Markets Committee (FOMC) is expected to convene for a two-day monetary policy meeting, which is expected to culminate in a decision to let the Fed funds target rate stand at 5.25%-5.50%.
Investors will scrutinize the accompanying statement and Fed Chair Jerome Powell's subsequent Q&A session for clues regarding the central bank's path forward with rates.
«The Fed wants to see the cumulative effects of their rate hikes on the
