The record-breaking rebound in the US stock market may face the most difficult period of 2024 next week, with a series of dazzling risk factors waiting to be revealed.

Earnings reports of major technology companies, volatility in the US bond market, Friday's non-farm payroll data, and the final sprint of a fierce presidential election will all have a significant impact on the market.

Technology stocks face earnings test.

Eric Beiley, Executive Director of Steward Partners, said, "This is an important earnings week, and the performance of the 'Big Seven' is crucial. We need to see strong performance from these companies because stock valuations are very high."

Although the rebound from the beginning of the year has expanded to mid-cap and even small-cap stocks, these stocks may benefit from the Fed's shift to rate cuts, yet mega-cap technology stocks seem to be back in favor.

FactSet data shows small-cap stocksE-mini Russell 2000 Index Dropped by 3% in the week ending last Friday, while the information technology sector of the S&P 500 rose by 0.2%.

Keith Lerner, Co-Chief Investment Officer at Truist Advisory Services, said: "Large technology stocks may bring surprises, or they could be traps."

If this is not enough to increase market uncertainty, Apple (AAPL) and Amazon (AMZN) will report their third-quarter earnings around Halloween, which is typically one of the more volatile days of the year as it falls right in the typical end-of-month portfolio rebalancing period.

The non-farm data is the focus.

Federal Reserve officials still hope that the labor market can maintain a delicate balance, neither cooling too much nor overheating, thereby reigniting inflation concerns.

The October non-farm payrolls report released on Friday will once again focus on this debate, although Wall Street analysts warn that the data may be distorted due to the impact of the Boeing Company (BA) strike and the recent two strong hurricanes.

Unexpectedly strong September employment data helped alleviate concerns about a sharp economic downturn. Investors are concerned that although higher wages are generally supportive, they may also trigger inflation, thereby hindering the Fed from cutting interest rates.

Lerner of Truist said: "A significantly negative or positive reading will have a major impact. I believe the employment report will be the only important thing—then it's the elections."

Election Anxiety

Although the US economy performed well in 2024, not all households have recovered the same financial resilience from the COVID-19 pandemic.

Since September, the significant sell-off in the US bond market can be attributed to the economy's resilience, forcing the bond market to abandon the previous expectations of a Fed rate cut. Concerns about the upcoming election are another increasingly important factor.

Wall Street holds little hope for Harris or Trump to address the massive US government deficit issue. Several billionaire investors, including Paul Tudor Jones, have recently warned about the US debt burden and the potential impact of Trump's tariffs and tax policies.

Currently, the tension surrounding the election is primarily focused on the US bond and gold markets, according to Mullarkey from SLC Management. While he is not a 'gold bug,' he notes that the increased gold purchases by global central banks have helped drive gold prices to new highs in October.

Mullarkey mentioned that Trump's campaign not only threatens to impose tariffs on imports but also to punish countries abandoning the US dollar. 'Gold is a widely recognized alternative or hedge against tail risk,' he said. If the election results bring more tension, the value of gold could further increase.