S&P 500 rally falters as banks struggle

Cons Discr outperformed sharply today (courtesy of Tesla), while Materials sector was at bottom of leaderboard; Energy continues to hold last place spot YTD … small caps still in negative territory MTD with Russell 2000 Value leading to downside (also in last place YTD) pic.twitter.com/fKVoW4Ab1j

— Liz Ann Sonders (@LizAnnSonders) October 24, 2024

The stock market rally sputtered this week as bank stocks dragged down the broader market, despite gains in the tech sector. The S&P 500 closed little changed on Friday after climbing almost 1% earlier in the day. New York Community Bancorp tumbled 8.3% on a weaker outlook, while Goldman Sachs Group Inc. dropped 2.3% and JPMorgan Chase & Co. lost 1.2%.

The S&P 500 might close lower this week, ending a 6-week win streak.

Down a month later is perfectly normal, but a year later? Higher 19 out of 22 times (86.4%) and up 12.6% on avg.

Bottom line, long weekly win streaks happen in bull markets and we are in a bull market. pic.twitter.com/Q1SV3Sbg6I

— Ryan Detrick, CMT (@RyanDetrick) October 25, 2024

Crypto shares also sank as the Wall Street Journal reported that the US is investigating Tether for possible violations of sanctions and anti-money-laundering rules.

Stocks To Watch | 📊 Ready, set, trade! Keep an eye on these stocks as they set the market abuzz #StockMarket pic.twitter.com/g0ZB2FA2Kx

— ET NOW (@ETNOWlive) October 25, 2024

However, a gauge of the “Magnificent Seven” megacaps, which includes tech giants like Apple, Microsoft, and Amazon, notched its best back-to-back jump since February. Traders are now bracing for key events, including the US presidential election and next week’s jobs report, for clues on the scope for Federal Reserve rate cuts. “Investors are still very cautious as we approach a pivotal couple of weeks,” said Henry Allen at Deutsche Bank.

#USMarketAtOpen | S&P 500 open flat, NASDAQ 100 up 0.6% and other significant updates 👇#UPS #Tesla #Carrier @Nasdaq pic.twitter.com/SN7nzoSb9U

— ET NOW (@ETNOWlive) October 24, 2024

“There’s been a reluctance to push the rally much further before we get some clarity on those, all of which will play a crucial role in shaping the outlook as we move into next year.” Five of the “Magnificent Seven” are set to report earnings next week, with Alphabet Inc., Meta Platforms Inc., and Amazon.com Inc.

Banks struggle, dragging S&P 500

poised for double-digit earnings growth fueled by ad spending. Apple Inc. could benefit from Chinese sales of its latest iPhones, while Microsoft Corp. might address concerns that it’s lagging rivals in artificial intelligence during its earnings call.   “These reports will likely be critical in shaping how investors view the overall earnings season,” said Anthony Saglimbene at Ameriprise. “As long as fundamental conditions remain firm, the bull market should continue to ride the near-term ups and downs in sentiment.” On the economic front, data showed that sentiment among US consumers increased in October to a six-month high as households grew more upbeat about buying conditions. They expect prices to climb at an annual rate of 2.7% over the next year, unchanged from the prior month. Treasury traders are wrapping up a wild week in which a gauge of bond-market volatility soared to a new high for the year, suggesting more upheaval to come. The severity of this week’s back-and-forth suggests even greater volatility in the coming days when the US bond market must weather myriad events—from key jobs data to the US election to a Fed meeting. The events and upcoming reports will significantly shape market sentiment and investor outlook as we move into the next critical weeks. No manipulation there, of course, for the election. Investors are now looking ahead to next week’s Federal Reserve meeting for clues on future monetary policy and any signals regarding quantitative easing measures.