On Tuesday, the last day of the month, Wall Street attempted to sustain the gains made the previous session, with stock futures generally higher.
Futures for the Dow Jones Industrial Average saw minimal movement. Futures on the Nasdaq 100 were unchanged and those on the S&P 500 increased by 0.1%.
Caterpillar reported third-quarter earnings on Tuesday that were higher than expected, continuing the earnings season. Caterpillar, however, alarmed investors by announcing that its fourth-quarter revenue would only be “slightly” higher than it was in the same time last year, potentially falling short of analysts’ predictions. In premarket trade, shares fell by more than 4%.
These actions follow the S&P 500’s breakout into correction zone on Monday, which marked the index’s highest day since late August. In its biggest day since early June, the Dow increased by nearly 1.6%, while the Nasdaq Composite gained around 1.2%.
On CNBC’s “Closing Bell: Overtime” on Monday, Anastasia Amoroso, chief investment strategist at iCapital, stated, “I don’t completely trust [Monday’s gain] because I do think some of the fundamentals are starting to change.” But “we did hit some oversold levels coming into this week,” she continued. Amoroso noted that as earnings season progresses, corporate buybacks are probably going to come back, which might support a recovery argument even more.
The key averages continue to point downward for the month’s conclusion. October marks the third consecutive negative month for the Dow and the S&P 500, which are down 1.7% and 2.8%, respectively. Both indices have now seen a three-month losing run for the first time since March 2020. The tech-heavy Nasdaq has lost more than 3% of its value this month and is on track to post a negative month for the third consecutive month.
Wall Street will be closely monitoring the Fed’s upcoming decision on interest rates, which is scheduled for this Wednesday. Based on Fed funds futures pricing, the CME FedWatch Tool indicates that there is around a 98% chance that the central bank will maintain current rates.