Market Summary

Investing.com — Stocks rose higher on Friday after an upbeat September jobs report lifted investor confidence in the strength of the economy, with the S&P 500 climbing 0.9% to close at 5,751.07 and the Nasdaq Composite rising 1.22% to 18,137.85. The Dow Jones Industrial Average gained 341.16 points, or 0.81%, setting a new record at 42,352.75.

The rally followed a stronger-than-expected jobs report, as nonfarm payrolls grew by 254,000 in September, surpassing economists’ expectations of 150,000. Meanwhile, the unemployment rate dropped to 4.1%, contrary to forecasts that it would remain at 4.2%.

For the week, the S&P 500 finished up 0.22%, the Dow edged up 0.09%, and the Nasdaq posted a 0.1% weekly gain, a sharp rebound after the tech-heavy index started Friday down over 1%.

Economic Reports Ahead

As for this week, attention turns to the upcoming Consumer Price Index (CPI) on Thursday and Producer Price Index (PPI) on Friday. With labor market risks diminishing, strategists at Deutsche Bank suggest that the two reports will be important in maintaining the Fed’s confidence that inflation is on track.

For CPI, they expect a +0.05% increase, dropping the year-over-year growth rate of headline CPI to 2.3%.

Q3 Earnings Season Begins

Earnings Reports

The Q3 2024 earnings season begins this week, with major banks like BlackRock, JPMorgan Chase, and Wells Fargo set to kick off the reporting period on Friday. Prior to these reports, investors will scrutinize PepsiCo on Tuesday and Delta Airlines on Thursday.

Strategists at Evercore ISI expect S&P 500 earnings per share (EPS) growth to slow to 6.5% year-over-year, with a modest 2.5% EPS surprise. They also note that political uncertainty may lead to heightened volatility this October.

Analyst Insights

Bank of America has noted that the upcoming earnings season will favor stock pickers, with the derivatives market pricing in significant potential moves.

Goldman Sachs has raised its 2025 S&P 500 EPS forecast and maintained a year-end index target of 6000.

Morgan Stanley suggests upgrading financials to overweight while favoring cyclicals over defensives following strong jobs data.

BTIG pointed out that while bulls held the primary breakout, volatility remains and the SPX appears to be running in place ahead of the election.