Wall Street closes higher on momentous earnings

With company earnings, economic data, and the Federal Reserve’s two-day monetary policy meeting this week, Wall Street rebounded on Monday.

The S&P 500 gained 1.2%, the Nasdaq gained almost the same amount, and the Dow increased by almost 1.6%. Microsoft and Amazon outperformed the market as a whole, and Megacap stocks did especially well.

The actions follow the Big Tech selloff last week, which according to Baird Wealth Management’s Ross Mayfield, an investment strategy analyst, created a “air of negativity” around an otherwise strong earnings season.

Given the backdrop of rising interest rates, unstable global markets, persistent inflation, and other macro headwinds that markets have witnessed, it is difficult to ask for much more, and yet businesses carry on as usual. That gives some hope because, although it may not be exciting, it still establishes a solid floor for stocks.

McDonald’s shares gained by more than 1.5% following the release of better-than-expected quarterly results, fueled by consumer demand for its more reasonably priced meals in the face of persistently high inflation.

Western Digital’s stock increased by more than 7% following the company’s announcement of its intention to split into two separate public companies.

In addition, chipmaker Onsemi’s stock dropped by nearly 22% after it issued a low-revenue forecast for the fourth quarter, citing a downturn in the electric vehicle market.

The Open Market Committee of the U.S. Federal Reserve will convene for a two-day meeting on monetary policy on Tuesday, with the expectation that a decision to maintain current interest rates will be made.

This week’s important economic data also includes the Labour Department’s October employment report, which is due on Friday.