A rocky start to October trading has Wall Street wondering what could boost stocks in the short term. All three major stock indexes edged higher after a tumultuous week. The Dow Jones Industrial Average and Nasdaq rose 0.1% each this week, while the S&P 500 rose 0.2%. Stocks have struggled this week as rising tensions in the Middle East triggered the strongest rise in oil prices since March 2023. October is typically a difficult trading month as investors take profits ahead of a year-end rebound. But after the first nine months of 2024 saw its strongest performance since 1997, traders are hoping the market can continue to defy stereotypes and build on this year’s gains. Now, investors are wondering what could reignite the market, especially given a host of unanswered questions ranging from the upcoming presidential election to geopolitics, giving investors reason to be cautious. “Stock markets have been living up to their reputation for heightened volatility in October,” said Glen Smith, chief investment officer at GDS Wealth Management. “As markets begin to grapple with the uncertainty surrounding the election, the Fed’s next move and corporate earnings reports, Uncertainty, we expect this volatility to continue in the coming weeks,” Horizon Investments’ Mike Dickson told CNBC Pro. In other words, the market may have “no place to trade” between now and the presidential election. However, he said a year-end rebound could still occur in November and December once the uncertainty of White House control is a thing of the past. Taking a step back, the market looks healthy. If the year ended on Friday, the S&P 500 would end with a gain of around 20.5%. Chris Zaccarelli, chief investment officer of the Independent Advisor Alliance, said: “Given that the market has been so strong this year, our pricing is a bit perfectionist.” Investors will focus on the inflation report and the minutes of the Federal Reserve meeting in the coming week. Note some potential catalysts. On Wednesday, investors will analyze the minutes of the September central bank meeting to gain insight into the future path of monetary policy. However, Zaccarelli said there was no need to know what was going on behind the scenes as the Fed took deeper cuts. The consumer price index is released a day later. With inflation rampant, it was considered a key economic release over the past few years. But Horizon Investors’ Dixon said price growth indicators have now given way to labor data after the Fed’s last meeting. He noted that annualized inflation has also lost importance as it approaches the central bank’s 2% target. “I would say the inflation report is probably not as important as it used to be,” Dickson said. “But a surprise in the wrong direction could have some impact on future interest rate policy.” Producer price index data will be released on Friday, providing insight into inflation from a wholesaler’s perspective. Mortgage and consumer confidence statistics are also data to watch. The early part of earnings season also kicks off next week. PepsiCo reports earnings on Tuesday, while Delta Air Lines reports on Thursday. JPMorgan Chase and Wells Fargo report earnings on Friday to cap off the week. The Week Ahead Tuesday at 6 a.m.: NFIB Small Business Index (September) 8:30 a.m.: Exports and Imports Data (August) Premarket Earnings: PepsiCo Wednesday at 7 a.m.: Mortgage Applications (Week Ending October 4) 10 a.m.: Wholesale inventories (August) 2 p.m.: FOMC meeting minutes Thursday 8:30 a.m.: Consumer Price Index (September) 8:30 a.m.: Initial jobless claims (week ending October 5) 11 a.m.: New York Fed President John Williams speaks Pre-market earnings: Delta Air Lines, Tilray Friday 8:30 a.m.: PPI (September) 10 a.m.: University of Michigan Consumer Sentiment Index Pre-market earnings: Bay Ryder, BNY Mellon, JPMorgan Chase, Fastenal, Wells Fargo
