Stocks rose sharply on Monday as investors weighed key earnings reports after a wild week of trading.
The Dow Jones Industrial Average gained 400 points, or 1.3%. The S&P 500 jumped 2.2%, and the tech heavy Nasdaq Composite surged 2.7%.
The S&P 500 just came off its fourth negative week in five with a 1.6% loss last week. A hotter-than-expected inflation reading stoked wild price swings in the markets as investors readjusted their expectations for the Federal Reserve’s coming rate hikes.
The big swings led the market to set new lows for the year, though some believe there are technical reasons for the market to see short-term relief.
“The 200-week moving average is a serious floor of support until companies fully confess or a recession officially arrives, both of which could take several more months and lead to a technical rally in the short term,” Morgan Stanley’s Mike Wilson said in a note to clients.
Monday’s moves came as the British pound rose on more policy reversals from the UK government. New UK finance minister Jeremy Hunt announced that almost all planned tax cuts would be scrapped. The pound traded 1% higher at $1.127 per U.S. dollar.
Meanwhile, the third-quarter earnings season is in full swing. Investors are monitoring if corporate America will have any significant downward revisions to their outlooks in the face of stubbornly high inflation and the economic slowdown.
Bank of America on Monday reported better-than-expected results, sending the stock higher in the stock up nearly 5%. Bank of New York Mellon also posted results that beat analyst expectations and its shares jumped more than 5%.
Many notable technology names are also reporting this week, including Netflix, Tesla and IBM. Johnson & Johnson, United Airlines, AT&T, Verizon and Procter & Gamble are other big companies on investors’ radar.