Dow Jones records its best monthly rise in nearly 50 YEARS as stocks surge 14%

The Dow saw its best monthly gain in nearly half a century on its last trading day in October, despite stocks falling subtly on Monday amid a slowing technology sector.

Even with the decline, Wall Street ended Monday — the last day of the month — on another high night, wiping out the steep early losses caused by grim inflation numbers, a series of rollercoasters that have rocked U.S. financial markets.

The Dow Jones Industrial Average fell 129 points, or 0.4 percent, on the day but still gained 14 percent for the month, its best since 1976.

The S&P 500 also lost 0.8 percent, but rose 193.55 points this month, a gain of 8 percent.

The tech-heavy Nasdaq, meanwhile, lost one percent, seeing a more modest monthly gain of 3.9 percent overall, while technology stocks continue to struggle.

That said, it was a good month for the major indices – despite the Federal Reserve will almost certainly raise interest rates Wednesday in a bid to reduce inflation that erodes Americans’ purchasing power without triggering a recession.

However, the gains stand in stark contrast to a mixed third-quarter earnings season and a difficult year for investors, amid slowing growth and major disappointments from major tech companies like Meta and Amazon.

Those names led the tech losses of the day as investors continue to shun the sector.

Also of concern to investors is this week’s looming jobs report, which some experts fear will show more signs of inflation amid recent rampant wage growth.

Meanwhile, many on Wall Street are looking for a signal from the Fed to determine whether it will pause or reduce rate hikes in the coming months.

Higher rates make buying a house, car or anything else bought on credit more expensive, and the hope is that this will slow the economy and the job market enough to undermine inflation.

But it takes notoriously long for higher interest rates to take full effect, and the Fed’s risks lead to a sharp downturn and significant job losses if it goes too far.

“Wednesday’s message will be crucial to future market expectations,” LPL Financial’s Quincy Krosby told CNBC of investors’ anticipation of the upcoming meeting.

He added to the traditional question-and-answer portion of Fed Chair Jerome Powell’s scheduled press conference announcing the decision: “Powell will have to refine his answers as if he were walking on a monetary tightrope.”

Investor nerves, meanwhile, remain on edge across sectors, in a year of far more losers than winners in investing.

Despite the fierce rally in October, major tech, industrial and consumer discretionary products have suffered heavy losses.

Nearly half of all Dow stocks, including big names like Intel, Nike, Salesforce, Microsoft, Boeing, Disney, Walgreens, Home Depot and Verizon, are all down more than 25 percent by 2022.

Tech was also not spared in the S&P, with Facebook owner Meta collapsing more than 70 percent this year amid CEO Mark Zuckerberg’s relentless financial commitment to support his faltering Metaverse project.

The company is currently trading at its lowest level since January 2016.

PayPal, chipmaker Nvidia and streaming giant Netflix have also all lost more than half their value as the chips sector continues to see losses as companies hit by the pandemic struggle to maintain production levels.

The damage to stocks in the sector was particularly pronounced, the SPDR S&P Semiconductor fell 39 percent year-on-year, exacerbating losses on news of export restrictions on semiconductor sales to China, as most of the chips are made in its political rival Taiwan.

And while some stocks, including those in the energy, healthcare and consumer goods sectors, posted gains this month, the broader market has undeniably struggled this year, the statistics show – as Americans continue to voice concerns about inflation and the fact that the Fed has repeatedly raised interest rates with little or no effect.

Many financiers argue that the bank was too late in its fight to quell inflation, with the ongoing hikes risking the country potentially coming under pressure. into recession next year, while the economy is catching up.

The Fed will meet on Wednesday and is expected to raise interest rates again. That meeting comes just two days before the equally highly anticipated jobs report, which experts say could point to further signs of inflation.

Analysts, meanwhile, have pointed to the effects of high inflation, pushing interest rates higher. and the rising value of the US dollar against other currencies, diluting the dollar value of sales abroad.

This alignment of factors is likely to affect companies ahead of the release of the year-end earnings reports, which financiers say will certainly reveal the true, troubled state of the US economy.

“The earnings season may not be bad,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management, “but being strong enough to turn this tide will be difficult.”