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Stocks in tow of the Fed. Not helped by a solid start to earnings season

October 23, 2023

Stock markets, not only in the US, are going through a difficult period. The main index of the New York Stock Exchange, the S&P 500, has written off over three per cent in the past week, and other Wall Street indices have also entered negative territory. Investors are not persuaded to make major purchases even by the solid results of companies for the third quarter. They are counteracted by statements by US central bank officials, who suggest that the likelihood of further interest rate rises is growing.
Stocks in tow of the Fed. Not helped by a solid start to earnings season

US companies have begun earnings season, during which they report their third quarter results. Even though the results are beating expectations in many cases, it is not helping stocks. The main index of the New York Stock Exchange, the S&P 500, lost more than three per cent of its value last week, and other indices also closed the week's trading in the red.* Negative market sentiment is also prevailing in European and Asian markets.[1],[2]

Increasing hawkish rhetoric from the US Federal Reserve seems to be to be blamed. Its officials, led by Governor Jerome Powell, are increasingly suggesting that the next monetary policy meeting could see another interest rate hike. [1]

"Evidence is gathering that we are permanently above trend growth or that labor market tensions are not abating. All of this could lead to continued high inflation, which raises the risk of further monetary tightening," Jerome Powell saidduring a speech at the Economic Club of New York on Thursday.

Expectations of further interest rate hikes by the Fed are pushing up demand for government bonds. The interest rate on the 10-year U.S. government bond hit its highest level since 2007, trading around 4.8 percent last week.

It is bond yields that represent one of the biggest problems in the stock markets nowadays. However, many experts believed that it was the significantly better-than-expected results of companies traded on stock exchanges that could help stocks grow. But, as already mentioned, this was not the case.

How significantly the Federal Reserve raises interest rates will be important and will determine the direction going forward. It will depend on whether the increase is in line with expectations or whether it brings a negative surprise. Therefore, it will also depend on what expectations Fed officials manage to create among investors.

If the markets' expectations are brought into line with the Fed's actual monetary policy, the fundamental factors that influence financial markets will regain importance. It can therefore be assumed that the current negative mood on the markets is mainly short-term in nature and that it is the fundamentals that will ultimately prevail. [2] Unless another negative event occurs. The fact is that the escalating conflict between Israel and the terrorist movement Hamas, which controls the Gaza Strip, is not easing the situation.

* Past performance is no guarantee of future results.

[1,2] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.

[1] https://www.investing.com/indices/stoxx-600

[2] https://www.investing.com/indices/hang-sen-40

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JPMorgan Chase Disappoints Wall Street: Even a Profit of $15.3 Billion Fell Short of Expectations

October 19, 2026

JPMorgan Chase zveřejnil 13. října výsledky za třetí čtvrtletí roku 2026, které pro Wall Street znamenaly neobvyklé zklamání. Největší americká banka vykázala zisk 5,57 USD na akcii oproti odhadu 5,85 USD a podle údajů LSEG poprvé od posledního čtvrtletí roku 2023 nesplnila prognózy zisku. Slabší výnosy z dluhopisových trhů a zpomalení investičního bankovnictví ukázaly, kde naráží její růst na omezení. Pro investory je nyní zásadní, zda banka dokáže udržet růst výnosů a zároveň zvládnout rostoucí náklady.1

Lamb Weston Surprises the Stock Market: Profit Falls 55%, Shares Jump 7.5%

October 12, 2026

Frozen french fry manufacturer Lamb Weston announced its results on October 6, 2026, revealing a striking discrepancy between reported profits and the stock market’s reaction. Net income plummeted 55% year-over-year, yet investors responded by buying shares. The company exceeded expectations and raised its full-year outlook. Sales growth in North America and cost-cutting measures suggest that changes in the company’s operations are beginning to pay off. The question remains, however, whether this progress will be enough to resolve problems overseas. [1]

TD SYNNEX Far Exceeded Expectations: Revenue Jumped 38%, but Shares Fell After the Earnings Report

October 5, 2026

TD SYNNEX reported results that, at first glance, look very strong and confirm that the company is benefiting from growing demand for technology infrastructure. Upon closer inspection, however, the picture is not entirely clear-cut. Behind the record numbers lies a combination of rapid expansion, shifting margins, and significant cash flow fluctuations, which investors have begun to view with far greater sensitivity than revenue growth alone. It is precisely the difference between what the income statement shows and what is happening beneath the surface that makes TD SYNNEX’s latest quarter a much more interesting story than the headline numbers alone would suggest.

AutoZone Surprises Wall Street with Earnings: EPS Jumps 15%, but Weaker Sales Reveal Pressure on Customers

September 28, 2026

AutoZone closed fiscal year 2026 with results that appear very strong at first glance. Fourth-quarter revenue rose 5.6% year-over-year to $6.59 billion, net income increased to $931.6 million, and earnings per share reached $56.05, approximately 15% higher than a year ago and above Wall Street expectations. Beneath the surface, however, a weakness remains. Comparable sales growth fell short of forecasts, and American DIY car repairers continue to curb their purchases.1

David Matulay

Analyst

David Matulay is an analyst at InvestingFox. He joined the company in 2023 as Head of Trading and Portfolio Manager. Prior to that, he gained three years of experience as a financial analyst at Advena Hedge Fund.
David graduated in Industrial Informatics from the Secondary Industrial School of Electrical Engineering in Bratislava and in Finance, Banking and Investing from the University of Economics in Bratislava. He is currently studying international and diplomatic studies at the University of International and Public Relations in Prague.

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