Wall Street offers a technical rebound before the Fed

The New York Stock Exchange started the week with a technical rebound on Monday, after a weekly loss, pending a decision from the American Federal Reserve (Fed) this week.

After falling into the correction zone on Friday, the broader S&P 500 index, the most representative of the American market, ended up 1.20% at 4,166.82 points.

The Dow Jones gained 1.58% to 32,928.96 points and the technology-dominated Nasdaq climbed 1.16% to 12,789.48 points.

The positive direction of prices is linked to “the negative disposition which preceded”, assured Patrick O’Hare of Briefing.com stressing that the fact that the market entered “in the correction zone” gave rise to a burst of rebound and a wave of downward buying.

Same story at Spartan Capital where Peter Cardillo believes that the S&P 500 in correction has motivated “this technical rebound”.

The analyst also highlighted other upside factors for the stock market including “the weaker dollar and falling oil prices.”

Finally, “even if the war has intensified between Israel and Gaza, it has not spread to other countries”, underlined the analyst, which has relieved investor morale.

The market had been given confidence on Monday before the opening by the results of McDonald’s in the third quarter.

The fast food chain posted a 14% increase in sales to $6.69 billion. Thanks in particular to price increases, profit climbed 17% to $2.32 billion, more than expected.

The stock ended up 1.70% at $260.

Among the other results of the week which could cement the rebound, those of Apple on Thursday (+1.23% to 170 dollars) feature prominently.

Investors will monitor the sales performance of the iPhone 15 in China.

Figures from construction equipment leader Caterpillar and the Pfizer laboratory are also expected on Tuesday. On Wednesday it will be the turn of Airbnb, delivery company DoorDash, Electronic Arts and Qualcomm among others.

The communication services sector (+2.06%) led the rebound.

Meta, which announced that its ad-free Facebook and Instagram subscriptions would be paid for in Europe, gained 2%, Google (Alphabet) grew by almost as much and Netflix jumped by more than 3%.

Amazon gained 3.89% to $132.71 while Tesla fell 4.79%, its stock falling below $200 to $197.36, the lowest in five months.

The semiconductor group ON Semiconductor Corporation collapsed 21.77% to $65.34 after a decline in its turnover in the third quarter and a weaker outlook for the next quarter.

In the automobile sector, General Motors returned to the green (+0.51%) after finally reaching an agreement in principle with the UAW union to end the strike that began on September 15. GM is the last of the three manufacturers to reach an agreement on the collective agreement with the union after its rivals Ford (-1.96%) and Stellantis (-0.28%).

The event of the week will be, on Wednesday, the decision of the American central bank (Fed) on interest rates and the press conference of its president Jerome Powell.

“Almost everyone expects rates to be left unchanged between 5.25% and 5.50% with only a 1.4% chance of being raised again,” assured Art Hogan of B. Riley Wealth Management.

On the central bank agenda, the market will also have its eyes on the Bank of Japan which meets on Tuesday and the Bank of England which will be its turn on Thursday.

On Friday, the official employment figures in the United States in October will set the tone, while analysts expect a clear easing of the labor market with half as many job creations as in September.

Yields on 10-year Treasury bills, which touched the 5% threshold last week for the first time in 16 years, remained at 4.88% compared to 4.83% at the previous close.