Dow rises by more than 500 points as traders look to robust earnings season
By Lucy Bayly, John Towfighi, CNN
New York (CNN) — Wall Street kicked off a new week in high gear as optimism rose that the 20-day shutdown of the federal government could soon draw to a close.
National Economic Council Director Kevin Hassett told CNBC Monday he believes the shutdown is “likely to end sometime this week” and that the Trump administration would implement punitive new measures if Democrats in the Senate continue to hold out.
Traders are also feeling hopeful that the latest round of earnings reports will reveal positive corporate growth despite uncertainty in the economy. Around 85% of companies in the S&P 500 who have reported so far this quarter have beaten expectations, according to FactSet.
The Dow was around 550 points higher Monday afternoon, or 1.19%, partly fueled by shares of Apple (AAPL), which gained 4% and hit an intraday record high after a report showed robust sales of the iPhone 17 model in the United States and China. The iPhone Air sold out in China just minutes after its launch, according to the South China Morning Post.
The S&P was 1.2% higher and on track for a record high close. The tech-heavy Nasdaq gained 1.5%.
Markets took a nosedive earlier this month after President Donald Trump threatened to substantially raise tariffs on China after it pulled back on exports of its valuable rare earth minerals, which are required in the production of electronics. The Dow plunged by nearly 900 points October 10 on fears of an escalation in the trade war between the world’s two largest economies. But Trump has since walked back those threats, noting that massive tariffs on China simply aren’t a sustainable option.
Investors now turn their focus to Big Tech: “The stock market’s next big test may be big tech earnings towards the end of October and into November, as investors will be looking for more clarity on how spending on artificial intelligence is leading to profitability,” wrote Rick Gardner, chief investment officer at RGA Investments.
The so-called Magnificent Seven stocks — Meta, Amazon, Tesla, Nvidia, Microsoft, Alphabet and Apple — have contributed 40% of the S&P’s gains this year and most are reporting their third-quarter earnings this month.
This story is developing and will be updated.
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