Equities closed out an otherwise strong October in the red on Monday, as a rise in bond yields and declines in some big technology stocks weighed on the major indexes.
The blue-chip Dow Jones Industrial Average slipped 0.4% to finish at 32,733, while the broader S&P 500 fell 0.7% to 3,872. The tech-heavy Nasdaq Composite slumped 1.0% to close at 10,988.
Major tech names continued their selloff from last week, which featured a slew of disappointing quarterly earnings reports and forecasts. Dow components Apple (AAPL (opens in new tab), -1.5%) and Microsoft (MSFT (opens in new tab), -1.6%) were just two of the names in the multi-trillion-dollar-market-cap club to once again lose ground on Monday. Google parent Alphabet (GOOGL (opens in new tab), -1.9%) and Amazon.com (AMZN (opens in new tab), -0.9%) likewise continued to struggle, as did Facebook parent (and former mega-cap darling) Meta Platforms (META (opens in new tab), -6.1%).
Meanwhile, the yield on the benchmark 10-year Treasury note rose to 4.07% ahead of the Federal Reserve’s regularly scheduled two-day policy meeting later this week. Market participants expect the central bank to once again raise short-term interest rates Wednesday, with a fourth 0.75%-point swipe at persistent inflation.
In October, Stocks Soared. Is the Bear Market Dead?
October might have ended with a whimper, but the month overall delivered big-time gains for equity investors. The S&P 500 rose 8.0% on a price basis for the month, and even the beaten and bruised Nasdaq tacked on a respectable 3.9%.
But no one did better than investors in the bluest of blue-chip stocks. The Dow, that elite bastion of just 30 blue chips, rose 14.0% for the month. Indeed, it was the Dow’s best October since 1975. Partly that’s a function of the Dow being a haven for companies with rising and reliable dividends (opens in new tab). Indeed, a mini-portfolio of the Dow’s best dividend stocks (opens in new tab) is clobbering the broader market so far this year. The Dow is also home to some of the best stocks to own in a bear market (opens in new tab).
What’s most encouraging is what has historically come next when the Dow produces a boffo October (opens in new tab): the blue-chip barometer has gone on to generate even more impressive upside over the following three-, six- and 12-month periods.
It remains to be seen if October will maintain its reputation as a bear-market killer, but so far so good. Read on to see what history has to say about the market’s prospects after the Dow logged one of its best Octobers in ages (opens in new tab).