U.S. stock futures rose Monday morning as Wall Street looked to extend its strong October momentum into November. S&P 500 futures climbed 0.17%, Nasdaq 100 futures gained 0.26%, and the Dow Jones Industrial Average advanced about 49 points, or 0.1%.
Markets are striving to maintain the rally that swept Wall Street throughout October. The S&P 500 gained 2.3% last month, the Dow Jones rose 2.5%, and the Nasdaq Composite jumped 4.7%, fueled by investor appetite for growth and artificial intelligence stocks, with tech giants and the G7 leading the market's moves. Optimism about easing trade tensions between the US and China also contributed to the gains.
Despite the positive atmosphere, investors are still closely monitoring developments in Washington. The ongoing US government shutdown is delaying the release of key economic data, including the monthly jobs report that was due this week. Meanwhile, the Supreme Court is set to hear arguments this week on the legality of the sweeping tariffs imposed by former President Donald Trump.
Earnings season and lack of government data
The earnings season in the United States continues at a strong pace. Nearly 300 S&P 500 companies have reported their third-quarter results so far, with more than 100 others expected to release their results this week, including Palantir, SuperMicrosoft, and AMD.
In the absence of government data, the Institute for Supply Management and S&P Global reports on the manufacturing and services sectors may gain more traction this week, as investors rely on them to assess the economy's performance. The University of Michigan's consumer confidence report is also expected on Friday, amid growing concerns about a slowdown in consumer spending.
Analysts believe the recent gains were driven in part by continued momentum in artificial intelligence stocks, along with signs of improving trade relations between Washington and Beijing, which has partially restored confidence to US markets.
Optimism about corporate earnings and expectations for the strongest month
So far, FactSet data shows that more than 300 S&P 500 companies have reported their third-quarter results, with 80% exceeding analysts' expectations, bolstering confidence in the strength of corporate economic performance. More than 100 additional companies are expected to release their reports this week, including AI firms such as Palantir and AMD.
Tom Lee, head of research at Fundstrat, wrote that US corporate earnings remain strong, supported by three key factors: continued heavy spending on artificial intelligence, with Amazon’s strong third-quarter results confirming this trend; the acceleration of financial innovation via blockchain technology; and the Federal Reserve’s accommodative monetary policy, which began cutting interest rates and ending its quantitative tightening program on December 1.
Wall Street may also receive a seasonal boost during November, as historical data shows the S&P 500 averages gains of 1.8% during this month, making it historically the strongest month of the year.
