December 2, 2022

Stocks have soared as much as 600 points since the start of October and into the new quarter

Stocks rallied on Monday to start the new month and quarter as Treasury yields eased to levels not seen in nearly a decade.

The Dow Jones industrial average rose 603 points, or 2.1%. At one point it advanced to around 700 points. The S&P 500 rose 1.9% in silver, falling to its lowest level since November 2020 on Friday, and the Nasdaq Composite gained 1.4%.

Those moves came in yields on the 10-year U.S. Treasury note Rolled It should trade at around 3.7%, after being over 4% at one point last week.

“It’s pretty simple at this point, the 10-year Treasury yield is rising, and stocks are under pressure,” said Raymond James’ Davis McCourt. “It goes down, the stakes go up.”

Wall Street is coming off a rough month, with the Dow and S&P 500 posting their biggest monthly losses since March 2020. On Friday, the Dow closed below 29,000 for the first time since November 2020.

The Dow fell 8.8% in September, while the S&P 500 and Nasdaq Composite lost 9.3% and 10.5%, respectively.

For the quarter, the Dow fell 6.66%, its first three-quarter loss since the third quarter of 2015. The S&P and Nasdaq Composite both fell 5.28% and 4.11%, respectively, to end their third consecutive negative quarter. For the first time since 2009.

As the new quarter begins, all S&P 500 sectors sit at least 10% off their 52-week highs. Nine sectors ended the quarter in the negative.

In the fourth quarter, elevated inflation and the Federal Reserve’s intent to stop rising prices regardless of what that means for the economy will continue to weigh on markets, said Trust’s Keith Lerner. However, oversold conditions make the market vulnerable to a sharp short-term bounce on good news, he added.

“I think we may be set up for some kind of recovery, but the underlying trend at this point is still a downward trend and continuing waters,” Lerner said.