Strong Earnings from UPS and PayPal Boost Sentiment
Focus on Results from Microsoft, Apple, and Alphabet This Week
U.S.-China Trade Deal Hopes and Rate Cut Expectations Also Lift Investor Confidence
All three major U.S. stock indexes opened higher on October 28 (local time) on the New York Stock Exchange. Investor sentiment was buoyed by expectations that a trade agreement would be reached at the upcoming U.S.-China summit scheduled for October 30, as well as strong corporate earnings. The S&P 500 index set a new intraday all-time high.
On the 27th (local time), traders were working on the trading floor of the New York Stock Exchange (NYSE) in the United States. Photo by Reuters Yonhap News
As of 9:46 a.m. on the New York Stock Exchange, the blue-chip Dow Jones Industrial Average was up 165.71 points (0.35%) at 47,710.3, compared to the previous trading day. The large-cap S&P 500 index rose 5.0 points (0.07%) to 6,880.16, while the tech-heavy Nasdaq index climbed 105.029 points (0.44%) to 23,742.485.
By stock, UPS surged 7.81% after announcing strong third-quarter results. PayPal jumped 9.98% after reporting solid earnings and telling CNBC that it would integrate its digital wallet with ChatGPT in collaboration with OpenAI. Microsoft rose 2.84% on news that it would strengthen its AI collaboration with OpenAI and hold a 27% stake in the for-profit entity under OpenAI's restructured governance.
The market expects that the earnings reports of big tech companies, to be released this week, will determine whether the stock market rally continues. On October 29, Microsoft, Alphabet (Google's parent company), and Meta (Facebook's parent company) will release their earnings. On October 30, Amazon and Apple are scheduled to announce their results. These large technology companies, known as the "Magnificent 7 (M7)," account for one-quarter of the S&P 500's total market capitalization.
Additionally, growing expectations for a Federal Reserve rate cut on October 29, and the possibility of a trade truce at the U.S.-China summit to be held in Busan, South Korea on October 30, are further strengthening the market's upward momentum.
Adam Turnquist, Chief Technical Strategist at LPL Financial, said, "Another round of solid earnings, signs of easing inflationary pressures, stronger expectations for rate cuts, and confirmation of this week's summit between President Donald Trump and President Xi Jinping have all supported buying pressure," adding, "This week, with 30 Nasdaq-listed companies set to announce earnings, the strength of fundamentals will be in focus."
U.S. Treasury yields remained steady. The 10-year U.S. Treasury yield, a global benchmark, stood at 4.0%, unchanged from the previous session, while the 2-year yield, which is sensitive to monetary policy, rose by 1 basis point (1bp = 0.01 percentage point) to 3.51%.
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