Markets Wrap – Red Monday

US indices fell on Monday as uncertainties surrounding rising oil prices, negative economic outlook and third-quarter results lie ahead.

The Dow Jones fell nearly 250 points, or 0.72%. The S&P 500 decreased by 0.7%. The Nasdaq Composite is trading 0.6% lower.

“What we’re seeing right now is a market trying to interpret all this data,” Plexo Capital managing partner Lo Tony told CNBC’s TechCheck. “It will take some time for things to work out.”

The US bond market closed on Monday for Columbus Day.

US WTI oil topped $ 82 a barrel at its session highs before trading around $ 80 on Monday. Rising prices have added to the risk of inflation.

“High or rapid increases in energy costs have caused recessions in the past and are likely to repeat history if energy prices continue to rise. “Higher energy prices lead to lower disposable incomes for consumers,” said Neil Beveridge of Bernstein in a note Monday.

Meanwhile, Goldman on Monday lowered its forecast for economic growth in the United States. The company lowered its growth forecast for 2022 to 4% from 4.4% and reduced its estimate for 2021 to 5.6% from 5.7%. The company noted the expiration of fiscal support from Congress and the slower-than-expected recovery in consumer spending, particularly services.

“For activities such as going to the cinema, many people do not expect to resume normal spending for at least another six months, suggesting that full normalization of economic activity may take some time,” Goldman economist Joseph Briggs said in a note. p>

This week, the big banks will begin their third-quarter earnings reports. JPMorgan released results Wednesday, followed by Goldman Sachs, Bank of America, Morgan Stanley, Wells Fargo and Citigroup later in the week. Delta Airlines and Walgreens Boots Alliance reports will also be published.

Analysts estimate earnings growth of 27.6% for the S&P 500 in the third quarter, which would be the third highest growth rate since 2010.

After losing 4.8% in September, the S&P 500 rose more than 1% in October and is over 3% all-time-high.