Dow climbs more than 400 points as Wall Street tries to add to last week’s rally

All three major indexes rose on Monday as traders tried to add to the strong gains seen last week and weigh the latest rate moves.

The Dow Jones Industrial Average rose 483 points, or 1.6%. The S&P 500 rose 1.5%, while the Nasdaq gained 1%.

Investors will be watching earnings from tech giants such as Apple, Alphabet, Amazon and Microsoft this week as the earnings season continues. Wall Street will also be watching more inflation data, with October’s manufacturing and services purchasing managers’ indices coming Monday.

“It’s all about earnings, and in our view, earnings are honestly in line with or below expectations,” said Terry Sandven, chief equity strategist at US Bank’s wealth management division. He said inflation and interest rate data were also setting the tone, but investors were currently clinging to earnings and forecasts during peak reporting season. “To a large extent, over the next two weeks, the market will go too.”

The 10-year Treasury yield rose on Monday, to recover from a previous decline. It last traded down around 1 basis point at 4.225%. The 2-year yield is also close to stability at 4.494%.

The moves come after another volatile week for stocks as the third-quarter earnings season heats up. The major averages posted their biggest weekly gains since June, with the Dow Jones rising 4.9%. The S&P 500 and Nasdaq rose 4.7% and 5.2% respectively.

Some of those gains came on Friday, when the Dow gained more than 700 points, while the S&P 500 and Nasdaq each rose about 2.3%. Investors reacted to corporate earnings and a Wall Street Journal report showing some Fed officials worried interest rate hikes might go too far.

“What’s unique about this week is of course that we’re starting at a high level,” said Kelsey Mowrey, president of Motley Fool Asset Management. “That good jobs data, I think, has given the Fed the ammunition it needs to keep raising rates, but Friday’s news really shook the market in a positive way.”

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