FX168 Financial News (North America) News #US Stock Review#. On Monday, October 21st, as Wall Street's long-standing record-breaking momentum gradually weakened, the US stock market fell from historical highs.

S&P 500 index fell by 0.18% to 5853.98 points; Dow Jones index fell by 344.31 points, or 0.8%, to close at 42931.60 points; Nasdaq Composite Index rose by 0.27%, closing at 18540.01.

(Source: FX168)

(Source: FX168)

Corporate earnings

This week, corporate earnings reports will reach a climax, with over 100 S&P 500 index component companies set to release financial reports. These include AT&T, coca-cola, IBM, general motors, american airlines, united parcel service, and tesla among other heavyweight companies.

So far, the performance has been mixed. According to FactSet data, among the S&P 500 index component stocks that have already reported third-quarter results, about 14% of companies have exceeded expectations. In recent months, analysts have significantly lowered earnings expectations for the third quarter.

Investors were highly anticipating the report released by Tesla on Wednesday, but the company fell by 0.84% before the report was released. The company's stock price has been unstable recently, with details on the latest developments in the highly anticipated autonomous taxi less than what investors had hoped for.

Tesla may face questions about production targets and regulatory challenges during the earnings conference call, as its highly acclaimed Cybercab failed to spark investors' interest and could not ease concerns about recent car sales.

Despite Netflix's strong start to the super stock season, the electric car manufacturer remains the focus of this week, as there are doubts about the performance of large tech companies.

Boeing will announce its latest performance on Wednesday. The company's stock rose by 3.11% after reaching an agreement with the union representing the striking machinists. Union members will vote on the contract proposal on Wednesday, ending the costly strike that has paralyzed aircraft production for over a month.

Market view

Dan Wantrobski, Head of Research at Janney Montgomery Scott, said, "The S&P 500 index remains overbought across multiple time frames, making it vulnerable to profit-taking in the short term."

Charlie McElligott, Cross-Asset Strategist at Nomura, stated last week, "Buyers are forced to over-hedge against a series of simultaneous events due to risk management. Investors globally are fixated on and focused on the 'worst-case scenario' left tail." He added that based on statistical data, when the aforementioned over-hedging occurs, the market tends to perform well, with median stock rising 13% one year later.

Miller Tabak's Matt Maley believes: "Due to the expensive stock market (especially in terms of price/sales ratio), when local geopolitical issues have become a major concern in the past, the stock market is more fragile than usual."

Adam Turnquist of LPL Financial stated that such a prolonged rally is relatively rare, having occurred only 53 times since 1950. He pointed out: "Despite the market entering a potential period of turmoil before the elections and facing upward resistance near the upper end of the rising price channel, historical experience shows that investors should buy on dips, as after six consecutive weeks of gains, the momentum tends to continue."

David Laut of Abound Financial stated: "We believe that the stock market will continue to rise in the future, especially as we are now entering a strong seasonal period in the market, with November and December traditionally being good months for the stock market." "Earnings season is heating up, and we will soon hear news from large tech companies and their latest spending on artificial intelligence. For large tech companies, this is a quarter to show the money."

Goldman Sachs' strategist David Kostin stated that due to investors shifting to bonds and other assets for better returns, the US stock market is unlikely to sustain its above-average performance of the past decade.

Bond market

The yield on the 10-year US Treasury note rose 10 basis points from late Friday to 4.18%, the highest level since July, up from 4.08%.

Rising US Treasury yields led to declines in stocks that are sensitive to rising interest rates, such as companies with high dividend payouts and enterprises in the real estate industry. Among the 11 sectors of the S&P 500, real estate stocks saw the largest drop, with shares of homebuilders Lennar and DR Horton falling by at least 3%.

There won't be many top-tier economic reports this week to affect US Treasury yields. An initial update on US business activity will be released on Thursday. The Bank of Canada will also announce its latest interest rate decision on Wednesday, which could involve a half percentage point cut.

CFRA's Chief Investment Strategist Sam Stovall stated: "Bond yields continue to rise, in my view, this means investors now believe the Fed will slow down its interest rate cuts, as the economy still shows resilience. Therefore, it may be more difficult for the Fed to bring inflation rates down to the 2% target level in the next year or so."

Focus stocks

AI chip giant Nvidia rose 4.14%, reaching a record high. Apple, the iPhone manufacturer, rose 0.63%, also setting a new closing record.

Spirit Airlines shares surged 53.06% after the airline successfully extended its credit card processing agreement. As of the day, the airline's stock price has fallen 91% year to date since canceling its merger plan with JetBlue Airways.

Trump Media & Technology Group's stock price rose 5.81%, breaking through $30, continuing the strong momentum seen since it briefly fell below $12 last month. Former President Donald Trump's Truth Social platform is still making losses, but its stock price is often more influenced by Trump's chances of reelection.

Disney's stock fell 0.68%. The company appointed James Gorman as Chairman of the Board and announced the appointment of a new CEO in early 2026.

Microsoft rose 0.15%. The company is launching a set of artificial intelligence tools aimed at enabling enterprise employees to send emails, manage records, and take other actions, expanding the impact of artificial intelligence and intensifying competition with rivals such as Salesforce Inc.

Kenvue Inc rose 5.52%. Activist investor Starboard Value acquired a stake in this telematics manufacturer, hoping to boost the company's stock price through reform, leading to an increase in the company's stock price.

Kaiyun Group's US stocks fell by 1.94%. According to data compiled by Bloomberg, Citibank downgraded the stock to neutral, canceling the buy rating it has held for over a decade.