Stocks rebound to start week, Dow rallies 500 points for best day since June: Live updates

Stocks rallied on Monday, with the S&P 500 ending the day out of correction territory, as traders kicked off a big week filled with a Federal Reserve rate decision, jobs report and Apple’s earnings.

The Dow Jones Industrial Average gained 511.37 points, or 1.58%, to 32,928.96. The 30-stock index registered its best day since June 2.

The S&P 500 jumped 1.2% to 4,166.82 in its best performance since late August. The Nasdaq Composite rose 1.16% to 12,789.48.

Communication services was the best-performing S&P 500 sector, up by more than 2% in its best day since late August. Mega-cap tech stock stocks Amazon and Meta Platforms jumped 3.9% and 2%, respectively.

Those moves come after the S&P 500 fell into correction territory last week. The broader index shed 2.5% for the week to put it down by more than 10% from its 2023 closing high. It’s off 2.8% for October, on pace for its third-straight negative month which would be its first such streak since 2020 as the pandemic struck.

“We closed on the lows last week,” said Art Hogan, chief market strategist at B. Riley Financial. “Oftentimes when you get that kind of negativity going into a weekend and nothing new arises that changes the outlook for markets and the economy, you get a bit of a claw back on Monday.”

“Investors are finally feeling a little bit more confident that perhaps we priced in enough bad news and that’s really manifesting in a stronger market today,” he added.

The Federal Reserve decision looms Wednesday, when the central bank is widely expected to hold its benchmark interest rate at the same level. With surging interest rates as the main culprit of this stock market correction, investors will be hoping the Fed signals it could be finished with its rate hiking. Traders expect the Fed to be done raising rates at least for 2023.

“Whilst we have a Fed meeting, the consensus has never been clearer that they’re not going to do anything at this particular meeting, and that’ll be back to back meetings of them not raising rates,” Hogan said. “I think that may signal that the cycle of raising rates is over, and I think that that likely helps to sort of stop that parabolic rise we’ve seen in Treasury yields.”

“I think if we see rates plateauing here for a bit that would certainly usher in some good news,” Hogan added.

The 10-year Treasury yield jumped above 5% to start last week, but it traded around 4.89% on Monday. Friday will bring the October jobs report with investors hoping for some slowing in the labor market that will allow the Fed to feel comfortable with staying on hold the rest of the year.

Apple will report earnings Thursday after the bell. The S&P 500’s largest member is in a correction itself, down 14% from its 52-week high.

— CNBC’s Jeff Cox contributed to this report.