The S&P 500 (SNPINDEX: ^GSPC) has risen 22% since the beginning of the year amid enthusiasm for artificial intelligence and interest rate cuts, setting about 40 new all-time highs along the way. Importantly, the S&P 500 had its best year-to-date performance through the third quarter since 1997.
That momentum could strengthen or weaken depending on what happens on Thursday, October 31st. Several Magnificent Seven companies will report earnings around that time, and investors will receive important economic data on that day. All of these variables can potentially have a significant impact on the S&P 500.
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Here are the important details.
Microsoft and Metaplatforms will report their September quarter results after the market closes on October 30th. Both companies account for 10% of the S&P 500 in terms of market value, so their financial reports can have a big impact on the stock market the next day. Similarly, Amazon and Apple will release their results after the market closes on October 31st. Both companies account for 11% of the S&P 500, so their reports could have an equally significant impact on the market.
Below you’ll find more details on the consensus estimates for these companies.
Microsoft: Wall Street expects revenue to rise 14% to $64.5 billion and profit to rise 4% to $3.10 per share. Analysts will be keeping an eye on cloud computing sector Microsoft Azure for signs of accelerating growth amid the artificial intelligence (AI) boom.
Meta Platforms: Wall Street expects sales to rise 18% to $40.3 billion and earnings to rise 19% to $5.24 per share. Analysts will keep an eye on engagement trends across the company’s social media platforms and watch for market share growth in digital advertising.
Amazon: Wall Street expects sales to rise 10% to $158 billion and profits to rise 21% to $1.14 per share. Analysts will be watching for strong growth in its cloud computing division, Amazon Web Services, and continued improvement in retail margins.
Apple: Wall Street expects revenue to rise 6% to $94.5 billion and profit to rise 5% to $1.53 per share. Analysts will be looking for evidence that Apple Intelligence could drive the iPhone upgrade cycle.
Three of those companies, Microsoft, Meta and Amazon, account for a third of Nvidia’s revenue, according to Bloomberg. So any comments about AI spending could cause Nvidia’s stock price to soar. And the ripple effects could ripple across the technology and communications services sector, which makes up 40% of the S&P 500.
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In addition to earnings from big tech companies, investors will get important macroeconomic data on October 31st. The Bureau of Economic Analysis will release changes in the Personal Consumption Expenditures (PCE) Price Index for September. The PCE price index is the Fed’s preferred measure of inflation.
Readers are probably familiar with another measure of inflation, the Consumer Price Index (CPI). Federal Reserve policymakers prefer the PCE price index because it tracks a broader range of prices. Economists expected PCE inflation to rise 2.2% in September in an Oct. 31 report.
Importantly, the Fed recently lowered its benchmark interest rate for the first time in four years. As long as the economy is healthy, interest rate cutting cycles usually lead to upward momentum in the stock market. According to JPMorgan Chase & Co., since 1984, in situations where the U.S. economy did not experience a recession within 12 months of the first interest rate increase, the S&P 500 index returned an average of 18% in that 12-month period. .
That said, if PCE inflation in September is higher than expected on October 31st, the stock market could fall sharply. There is now a 95% chance that policymakers will cut interest rates by a quarter of a percentage point at their November meeting, according to futures market price data. But if PCE inflation picks up in September, it could leave rates unchanged, which could disrupt markets as investors spend the next month wondering what the Fed’s next move will be. be.
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JPMorgan Chase is an advertising partner of The Motley Fool’s Ascent. Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool’s board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Trevor Jennewine has held positions at Amazon and Nvidia. The Motley Fool has positions in and recommends Amazon, Apple, JPMorgan Chase, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: A long January 2026 $395 call on Microsoft and a short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
Why October 31st is a big day for the stock market Originally published by The Motley Fool
