U.S. equities charged forward for another day, extending a comeback that kicked off the week as earnings season sets into high gear.
The S&P 500 (^GSPC) surged 2.3% at the open, while the Dow Jones Industrial Average (^DJI) added 600 points, or 2%. The technology-heavy Nasdaq Composite (^IXIC) advanced 2.8%.
Sentiment got a boost Tuesday morning on third-quarter results from Goldman Sachs (GS) — Wall Street’s premier investment bank — which posted earnings that beat analyst estimates across the board despite challenging year-over-year comparisons. Shares rose more than 5% early into the session.
In an interview with CNBC, CEO David Solomon warned that there was a “good chance” the U.S. economy may enter a recession next year.
“That environment heading into 2023 is one that you’ve got to be cautious and prepared for,” he said.
Goldman Sachs is the last of the country’s six megabanks to unveil results. Despite better-than-feared figures from some names in financials that gave stocks a boost Monday, the banking industry has reported a year-over-year earnings decline of 13% for the third-quarter, driven primarily by increased provisions for loan losses to prepare for a possible recession, according to FactSet Research. Wall Street’s big banks are bellwethers of the U.S. economy and typically set the tone for the earnings season.
David Solomon, Chairman and CEO of Goldman Sachs, speaks at the 2022 Milken Institute Global Conference, in Beverly Hills, California, U.S., May 2, 2022. REUTERS/Mike Blake
The moves early Tuesday come after all three major averages rallied in the previous session, with the S&P 500, Dow, and Nasdaq notching gains of 2.7%, 1.9%, and 3.4%, respectively.
“As we continue to remind you, this kind of outsized move is not on its own historically indicative of either a healthy market or an investable low,” DataTrek Research Co-Founder Jessica Rabe said in a note.
The annual average number of days in which the S&P 500 gained more than 1% was 54 last year, while Monday’s bounce brings the year-to-date tally of such gains to 100 – an…