Stocks surge as Wall Street crawls out of a brutal September

U.S. stocks started October on a strong note Monday after the S&P 500 and Nasdaq Composite snapped their first three-quarter losing streak since the 2008 global financial crisis and the Dow posted its first period of losses since 2015.

The benchmark S&P 500 rose 2.6%, while the Dow Jones Industrial Average rose roughly 765 points, or about 2.7%, for its best day in more than two months. The tech-heavy Nasdaq Composite advanced 2.3%.

Major moves in energy markets kicked off the week, with oil prices rising as reports emerged that OPEC+ is considering a major production cut of more than a billion barrels per day. West Texas Intermediate (WTI) crude oil rose to above $83 a barrel.

Also in the UK, sterling rose after Prime Minister Liz Truss launched a tax cut plan that had sparked market jitters and an intervention by the Bank of England last week.

On the corporate front, shares of Credit Suisse ( CS ) pared losses from an earlier decline to close up 2.3%. Over the weekend, the global investment bank’s CEO issued a note to try to reassure major investors about the institution’s financial health, an effort that backfired and instead raised questions about the stability of the bank.

Credit Suisse also said last week it was exploring potential asset sales and certain business units as part of a strategic plan to be revealed later this month.

Tesla ( TSLA ) fell 8.6% on Monday after the electric vehicle giant reported on Sunday that it delivered 343,830 cars in the third quarter, a new record that came even as the company struggled with the shutdown of its factory in China. Still, the figure fell short of Wall Street expectations, which ranged between 358,000 and 371,000 vehicles.

A Tesla Model 3 electric vehicle (EV) is displayed at the China International Trade Fair for Services (CIFTIS) in Beijing, China, September 1, 2022. REUTERS/Florence Lo

A Tesla Model 3 electric vehicle (EV) is displayed at the China International Trade Fair for Services (CIFTIS) in Beijing, China, September 1, 2022. REUTERS/Florence Lo

Investors are recovering from a brutal month and quarter in which the three major averages entered a bear market. In September, the S&P 500 lost 9.3%, its worst monthly decline since the pandemic began in March 2020. The Dow shed more than 8% and the Nasdaq Composite more than 10%. During the quarter, the indices fell by approximately 5.3%, 4.1% and 6.7%, respectively.

As Wall Street turned the page, some strategists looked to October, which has been billed as a “bear market killer” based on historically strong returns, particularly in midterm election years. Every time the S&P 500 has fallen 7% or more in September, stocks have done well in October, noted Ryan Detrick of the Carson Group.

A high-stakes earnings season likely to result from cut forecasts and worsening fundamentals linked to inflation and rising interest rates, however, makes this time different.

“The focus will be on earnings because we are moving from a moderation shock, with higher interest rates, to a growth shock,” Luca Paolini, chief strategist at Pictet Asset Management, told Yahoo Finance Live in a recent interview. “That’s where we’re most concerned and the next earnings season is going to be really critical.”

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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