[New York Stock Market] Rise on Big Tech Earnings Expectations and Middle East Tension Easing... International Oil Prices Plunge 6%

Israel and Iran Conduct 'Limited Attacks' Causing Oil Prices to Plunge
5 of the 'Magnificent 7' Companies to Release Earnings This Week
Employment, Inflation, and Growth Rate Indicators Also Scheduled for Release

The three major indices of the U.S. New York Stock Exchange all closed higher on the 28th (local time). Investor sentiment revived amid growing expectations ahead of this week's consecutive earnings reports from big tech companies. The market is also paying attention to employment, inflation, and growth rate indicators. International oil prices plunged more than 6% after Israel's limited weekend attack against Iran.

[Image source=EPA Yonhap News]

On this day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average closed at 42,387.57, up 273.17 points (0.65%) from the previous trading day. The large-cap-focused S&P 500 index rose 15.4 points (0.27%) to 5,823.52, and the tech-heavy Nasdaq index gained 48.58 points (0.26%) to close at 18,567.19.

Israel launched airstrikes against Iran over the weekend but, contrary to concerns, did not target oil or nuclear facilities and ended the attack within a few hours. Iran emphasized its right to self-defense but did not respond immediately. The easing of fears of a full-scale war brought relief to the market.

International oil prices fell sharply by 6% due to the easing of Middle East tensions. West Texas Intermediate (WTI) crude oil dropped $4.40 (6.13%) to $67.38 per barrel, while Brent crude, the global oil price benchmark, fell $4.63 (6.09%) to $71.42 per barrel.

With geopolitical concerns easing, expectations for big tech earnings stimulated investor sentiment. Investors are focusing on this week's major corporate earnings announcements. Five of the 'Magnificent 7' companies are scheduled to report earnings: Alphabet (Google's parent company), Microsoft (MS), Meta (Facebook's parent company), Amazon, and Apple.

On Wall Street, amid already elevated stock price pressures, investors are expected to focus on whether these companies can sustain their growth and their comments related to artificial intelligence (AI) investments.

Mike Dickson, strategist at Horizon Investments, said, "Given the overall high valuations, the focus will be on whether they (big tech) can continue to achieve such growth rates."

Young-Yu Ma, Chief Investment Officer (CIO) at BMO Wealth Management, analyzed, "What we expect is whether these giant tech companies continue to increase spending in the AI sector. If some tech companies report earnings and indicate they will slightly ease some of these investments, the market may not accept it."

This week, key economic indicators will also be released consecutively. On the 29th, the Department of Labor's September Job Openings and Labor Turnover Survey (JOLTs) will be published; on the 30th, the October ADP private employment report; and on the 31st, weekly initial jobless claims data will be released. The U.S. third-quarter Gross Domestic Product (GDP) preliminary estimate will be announced on the 30th, and the Federal Reserve's most closely watched inflation gauge, the September Personal Consumption Expenditures (PCE) price index, will be released on the 31st.

With the U.S. presidential election just eight days away on the 5th of next month, there are also expectations that market volatility could increase.

Chris Larkin, Investment Managing Director at Morgan Stanley IT Trade, said, "This week's big tech earnings and employment data will provide sufficient potential fuel for short-term market momentum," but added, "We need to see whether investors will sit tight until the election is over next week." He explained, "Especially considering the volatility in the last two elections, the S&P 500 experienced sell-offs before the 2016 and 2020 elections and then surged afterward."

By individual stocks, tech shares rose. Apple increased by 0.86%. Alphabet rose 0.81%, Meta (Facebook's parent company) jumped 0.86%, and Amazon also gained 0.3%.

Government bond yields are on the rise. The U.S. 10-year Treasury yield, a global bond yield benchmark, rose 4 basis points (1 bp = 0.01 percentage points) from the previous trading day to 4.28%, while the 2-year Treasury yield increased 3 basis points to 4.13%.