As of the deadline, the three major indexes showed divergent trends, with the Nasdaq slightly down, the S&P 500 up 0.08%, and the Dow up 0.23%.

Following last week's job report showing a continued strong labor market, investors' optimism about the Fed's ability to achieve a soft landing is increasing.

Analyst Adam Crisafulli of Vital Knowledge stated: "Between the four major bullish factors (stimulus policies, downward inflation, resilient growth, and healthy corporate performance) and high valuations, the stock market is in a tug-of-war. The result is the S&P 500 index stuck in a sideways price pattern (albeit slightly biased upwards)."

Even with the potential upward trend in the US stock market, the market may face greater volatility in the historically most turbulent month (October), especially before the US presidential election.

The market is closely watching the latest meeting minutes to be released by the Fed on Wednesday afternoon Eastern Time.

BBH analysts stated in a report that today's Fed meeting minutes may show: some Fed officials opposed a 50-basis-point rate cut before being persuaded to vote in favor by a majority.

At the meeting on September 18th when the Fed initiated monetary easing, Board Member Bowman was the sole dissenter, voting in favor of a 25-basis-point rate cut. Subsequently, the Fed hinted at another 25-basis-point rate cut next month, providing some support for the US dollar.

Due to the diminishing expectations of interest rate cuts, the U.S. 10-year Treasury notes yield has been hovering above the key level of 4%. In the past few days, the decline in rate cut expectations has led to a large amount of selling. The latest speeches by Fed Vice Chairman Jefferson and Atlanta Fed President Bostic both indicated that a "cautious" approach will be taken.

Carmignac analyst Thozet predicts that after the Fed cuts interest rates by 50 basis points in September, the pace of rate cuts will slow down because "the possibility of a recession is decreasing, while the possibility of no recession is increasing."

This week, the market will also focus on the Consumer Price Index (CPI) for September on Thursday and the Producer Price Index (PPI) on Friday.

JPMorgan, Wells Fargo & Co, and other large U.S. banks will kick off the earnings season this week.

Bank of America stated that the third quarter will be an "excellent environment" for stock pickers, with S&P 500 index component stocks driving a significant portion of the index's returns.

The bank's stock and algo strategist believes that the pricing in the derivatives market reflects the largest historical single-stock level implied volatility since 2021 after the data release. Meanwhile, as of September, corporate earnings have contributed 45% to the 12-month roi of the S&P 500, and in the 'macro-driven market' from 2022 to 2023, earnings multiples lag far behind the roi.

BofA stock strategist Ohsung Kwon mentioned in a report on Sunday: "This earnings season could be a heaven for stock pickers." Kwon referred to the Fed's substantial 50-basis-point rate cut last month to 4.75%-5%, stating, "With the start of an easing cycle, we expect corporate earnings to play a larger role in future returns."

Focus stocks

Most growth tech stocks are falling, with Tesla, AMD, Taiwan Semiconductor down more than 1%, while NVIDIA retreats slightly.

China concept stocks are generally falling, with Netease dropping 6%, JD.com, Alibaba, and PDD Holdings declining over 2%.

$Tesla (TSLA.US)$ Falling by nearly 2%, preliminary data from the China Passenger Car Association shows that Tesla China delivered 88,321 vehicles in September.

$Boeing (BA.US)$ Falling more than 3%, placed on the negative watchlist by S&P, the company's negotiations with IAM union have once again collapsed.

Lithium chemical producers $Arcadium Lithium (ALTM.US)$ Rising more than 30%, Rio Tinto will acquire Arcadium in an all-cash transaction of $5.85 per share.

Editor/new