Stocks slipped Monday as the final trading day of October kicked off, but the major averages were poised to snap a two-month losing streak.
The S&P 500 last traded 0.5% lower, while the Nasdaq Composite tumbled 0.9%. The Dow Jones Industrial Average traded 60 points lower, or roughly 0.2%.
Markets made a huge comeback in October. The Dow guided those gains and was last up 14.1% for the month. The 30-stock index is on pace for its best month since 1976 as investors bet on more traditional companies, like banks, to lead the next bull. The S&P 500 and Nasdaq Composite are also up more than 8% and 4%, respectively, for October.
“Stocks are taking a breather after the big run last week,” said Ryan Detrick, chief market strategist at the Carson Group. “Then, considering the always important Fed meeting and interest rate decision on Wednesday, a pause makes even more sense. “
October’s gains have come despite a mixed third-quarter earnings season, which has shown slowing growth and a few major disappointments from large tech companies such as Meta Platforms and Amazon. Those names led Monday’s tech losses as investors drifted out of the growth sector.
Traders are preparing this week for the latest Federal Reserve meeting beginning Tuesday. The central bank is widely expected to hike interest rates by 75 basis points on Wednesday. Many on Wall Street are looking for a signal from the Federal Open Market Committee’s statement or Chairman Jerome Powell’s press conference that the Fed could pause its hikes or reduce their size in the near future.
“Wednesday’s message will be crucial for market expectations going forward,” said LPL Financial’s Quincy Krosby. “With the question and answer segment for the presser, Chairman Powell will have to finesse his answers as if he were walking a monetary tightrope.”
Earnings season continues this week with reports from Uber, Pfizer and Advanced Micro Devices. Investors are also looking ahead to October’s jobs report due out Friday.