Investing.com Summary

The S&P 500 closed higher on Monday, ending the third quarter with significant gains, supported by expectations of further interest rate cuts from the Federal Reserve.

By 4:00 p.m. ET (2000 GMT), the S&P 500 index increased by 0.3%, while the Dow Jones Industrial Average rose by 17 points (0.04%), and the NASDAQ Composite index gained 0.4%. The S&P 500 is up 5% for the quarter, recovering after a significant selloff on August 5, which was driven by recession fears that have since eased due to positive economic data.

Powell says rate cuts aren’t on preset course

Federal Reserve Chairman Jerome Powell stated that monetary policy is not on a predetermined path, but further rate cuts are likely if the economy continues to improve as expected. He commented, “Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral stance. But we are not on any preset course.” This statement follows Atlanta Fed President Raphael Bostic’s indication that he might support a 50 basis point rate cut if the labor market shows signs of weakness. The focus this week will be on labor market data, including jobless claims and private payrolls, as investors await the release of the October nonfarm payrolls report this Friday, with economists anticipating the addition of 144,000 jobs.

Stellantis cuts annual forecasts; Nio jumps on cash injection

On the corporate front, Stellantis (NYSE:STLA) faced a significant drop of over 12% after cutting its annual forecasts and acknowledging it would expend more cash than previously estimated due to adverse industry trends, increased costs in transforming its U.S. operations, and competition from Chinese electric vehicles.

AT&T (NYSE:T) saw a 0.5% rise after announcing plans to sell its 70% stake in satellite TV provider DirecTV to private equity firm TPG for $7.6 billion, marking its exit from a declining business. CVS Health (NYSE:CVS) rose 1.5% following a report that Glenview Capital, a major shareholder, is set to meet with CVS leadership to propose solutions for the company’s struggles.

Insurance brokerage Marsh & McLennan (NYSE:MMC) has agreed to acquire rival McGriff Insurance Services for $7.75 billion, as the industry anticipates increased spending on policies amid an improving economic outlook. Meanwhile, Nio Inc. Class A ADR (NYSE:NIO) closed 2% higher after announcing a 13.3 billion yuan investment into its Chinese operations, alongside strategic investors contributing approximately 3.3 billion yuan.

Crude gains as Israel escalates attacks

Oil prices increased on Monday amid concerns about a potential escalation in the Middle East conflict, as reports surfaced that Israel indicated to the U.S. it is preparing for a limited ground invasion of Lebanon regarding its conflict with Iranian-backed Hezbollah. Last week, both oil contracts experienced declines due to rising demand concerns following China’s fiscal stimulus not restoring market confidence.

(Peter Nurse contributed to this story)