Dow futures rise more than 150 points on first trading day of November as investors await key Fed meeting

U.S. stock futures posted a strong gain in early morning trading Monday as investors readied for the first trading day of November.

Market participants are gearing up for another week of corporate earnings, a key Federal Reserve meeting on Wednesday and October’s jobs report.

Dow futures rose 159 points. S&P 500 futures and Nasdaq 100 futures both traded well into positive territory.

As earnings season continues this week, investors will also be monitoring the Federal Reserve’s two-day meeting Tuesday and Wednesday. The central bank is widely expected to announce that it will begin to unwind its $120 billion in monthly bond purchases and end the program entirely by the middle of next year.

Investors will also be looking for the Fed’s comments on rising prices as inflation has been running at a 30-year high.

“The Fed is part of a global move to remove accommodation, and the market drives right past that,” Bleakley Advisory Group CIO Peter Boockvar said. “In a way, the stock market is playing a game of chicken, with this inflation move and interest rates and the response from central banks.”

Investors will get a look at the Institute for Supply Management’s manufacturing index for October, which is expected to fall to 60.3 from September’s 61.1. Any number above 50 is considered expansion.

The other big event for the week will be October’s employment report Friday, which could show some improvement in hiring, as new cases of Covid-19 continued to decline. Economists surveyed by Dow Jones expect nonfarm payrolls to show an increase of 450,000 after September’s meager 194,000 gain, with the unemployment rate edging down to 4.7%.

“Key to the report will be how much wage inflation rises and whether the labor force participation rate finally picks up after so many recently came of extended unemployment benefits,” said Jim Paulsen, chief investment strategist for Leuthold Group.

Stocks closed out October on Friday with all three major averages closing at record highs. The S&P 500 and Nasdaq clinched their best months since November 2020.

The Dow Jones Industrial Average rose 5.8% in October. The S&P 500 rallied 6.9% last month and the technology-focused Nasdaq Composite added 7.3% in October. The month marked a rebound from September, where the major indexes declined.

Corporate earnings season dominated October amid solid earnings even with global supply chain concerns. About half of the S&P 500 companies have reported quarterly results and more than 80% of them beat earnings estimates from Wall Street analysts, according to Refinitiv.

–CNBC’s Patti Domm contributed to this report.