The S&P 500 Index ($SPX) (SPY) closed up by +0.41% on Monday, the Dow Jones Industrial Average ($DOWI) (DIA) closed down by -0.07%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +1.17%. December E-mini S&P futures (ESZ26) rose +0.43%, and December E-mini Nasdaq futures (NQZ26) rose +1.18%.
Stock indexes settled mostly higher on Monday, with chipmakers and AI-infrastructure stocks leading the broader market higher after last week’s selloff. Earnings optimism is lifting stocks ahead of this week's earnings results from Meta Platforms, Tesla, and Netflix.
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Stocks fell from their highs on Monday, and the Dow Jones Industrials fell into negative territory after rising crude oil prices pushed bond yields higher. WTI crude rallied more than +2% to a 5-week high on Monday, raising inflation expectations and bond yields. The 10-year T-note yield rose +6 bp to 5.14%.
Also on the downside, homebuilding stocks were under pressure after Monday’s US economic news showed the Oct NAHB housing market index fell 3 points to a 14-year low of 29, below expectations of 31.
Mostly better-than-expected Chinese economic news is positive for global growth prospects and stocks. China Q3 GDP rose +1.2% q/q and +4.5% y/y, stronger than expectations of +1.0% q/q and +4.4% y/y. Also, China's Sep industrial production rose +5.5% y/y, right on expectations and the largest increase in 6 months. In addition, China's Sep retail sales rose +1.1% y/y, stronger than expectations of +0.5% y/y and the largest increase in 6 months. Finally, China's Sep surveyed jobless rate unexpectedly fell -0.1 to 5.2%, below the expected 5.3% and signaling a stronger labor market. On the downside, China's Sep new home prices fell -0.14% m/m, the fortieth consecutive month of declines.
Stocks have support from the prospect of solid quarterly earnings results. According to data compiled by Bloomberg Intelligence, Q3 S&P 500 earnings are expected to climb by +25% from a year earlier, up from a July estimate of 22%. As of Monday, 46 of the S&P 500 companies have reported results, with 80% beating estimates.
Nov WTI crude oil prices (CLX26) erased early losses on Monday and jumped more than +2% to a 5-week high. Crude prices surged Monday amid escalating hostilities in the Middle East and the ongoing Russia-Ukraine war that are disrupting global energy supplies. Crude prices raced to their high on Monday afternoon on concern about escalation of hostilities in the Middle East after Iran said it has “no choice” but to assert control over the Strait of Hormuz and that “the strait belongs to Iran, and the US is now the cause of the current situation and must pay the price.” Crude prices initially moved lower on Monday after US Energy Secretary Wright said Persian Gulf oil flows have recovered to about 80% of their pre-war level, though refined-product shipments remain constrained.
Markets are discounting a 17% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.
Overseas stock markets settled mixed on Monday. The Euro Stoxx 50 fell to a 1-week low and closed down -0.98%. China's Shanghai Composite closed up +0.39%. Japan's Nikkei-225 Stock Average fell to a 1-month low and closed down -0.62%.
Interest Rates
December 10-year T-notes (ZNZ6) closed down -6.5 ticks on Monday. The 10-year T-note yield rose +6.7 bp to 5.140%. Monday’s stock rally reduced safe-haven demand for government debt and weighed on T-notes. T-note losses accelerated on Monday after WTI crude oil rose more than +2% to a 5-week high, raising inflation expectations and hawkish Fed-policy expectations. T-note losses were limited after Monday’s US economic news showed the Oct NAHB housing market index fell more than expected to a 14-year low.
European government bond yields moved higher on Monday. The 10-year German bund yield rose +3.0 bp to 3.456%. The 10-year UK gilt yield rose +5.9 bp to 5.432%.
The German Bundesbank said in a report on Monday that "inflation risks in the Eurozone are clearly tilted to the upside."
Markets are discounting a 9% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Chipmakers and AI-infrastructure stocks rallied on Monday, recovering some of last week’s rout. The iShares Semiconductor ETF (SOXX) closed up more than +2%. SanDisk (SNDK) closed up more than +6% to lead gainers in the S&P 500 and Nasdaq 100, and Western Digital (WDC) closed up more than +5%. Also, Marvell Technology (MRVL) closed up more than +4%, and Seagate Technology Holdings Plc (STX), Lam Research (LRCX), and Micron Technology (MU) closed up more than +3%. In addition, Intel (INTC) closed up more than +2%, and Advanced Micro Devices (AMD), Applied Materials (AMAT), Analog Devices (ADI), and Broadcom (AVGO) closed up more than +1%.
Cloud infrastructure stocks moved higher on Monday. Applied Digital (APLD) closed up more than +6%, and Nebius Group NV (NBIS) and Arista Networks (ANET) closed up more than +3%. Also, Lumentum Holdings (LITE) closed up more than +1%, and Oracle (ORCL) closed up +0.95%.
Home builders and building supplies were under pressure on Monday after the US Oct NAHB housing market index fell more than expected to a 14-year low. Builders Firstsource (BLDR) closed down more than -3%, and DR Horton (DHI) and Pulte Group (PHM) closed down more than -2%. Also, Lennar (LEN), KB Home (KBH), and Toll Brothers (TOL) closed down more than -1%.
Disc Medicine (IRON) closed up more than +38% after announcing that its investigational drug bitopertin met all primary and secondary endpoints in a Phase 3 Apollo trial in adults and adolescents with erythropoietic protoporphyria.
Cleveland Cliffs (CLF) closed up more than +15% after reporting Q3 adjusted Ebitda of $612 million, above the consensus of $591.5 million.
Amazon.com (AMZN) closed up more than +4% to lead gainers in the Dow Jones Industrials after Morgan Stanley named the stock a top pick with a price target of $350.
Datadog (DDOG) closed up more than +4% after Bernstein upgraded the stock to outperform from market perform with a price target of $350.
NRG Energy (NRG) closed down more than -4% after Jeffries cut its price target on the stock to $131 from $160.
Ameriprise Financial (AMP) closed down more than -4% after Bank of America Global Research double-downgraded the stock to underperform from buy with a price target of $445.
Earnings Reports (10/20/2026)
3M Co (MMM), Capital One Financial Corp (COF), Chubb Ltd (CB), Equifax Inc (EFX), General Electric Co (GE), General Motors Co (GM), Genuine Parts Co (GPC), Halliburton Co (HAL), Hasbro Inc (HAS), Intuitive Surgical Inc (ISRG), KeyCorp (KEY), MSCI Inc (MSCI), Netflix Inc (NFLX), Northrop Grumman Corp (NOC), RTX Corp (RTX), Synchrony Financial (SYF), United Airlines Holdings Inc (UAL).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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