As October comes to a close, investors are taking stock of the month’s market activity. From the war in the Middle East to company earnings and Treasury debt yields, there have been several factors shaping the market. All eyes have been on the Federal Reserve’s next moves as it tackles high inflation through interest rate hikes.
Dow Jones Industrial Average
Microsoft (MSFT) emerged as the best-performing stock in the Dow, buoyed by robust financial results announced on October 24. Notably, their Azure cloud business exceeded management’s expectations. Microsoft shares have experienced a 6.8% increase this month, marking their strongest performance since May. Overall, the stock has enjoyed a 40% surge this year, driven by anticipation for the future of artificial intelligence.
On the other hand, Chevron (CVX) faced setbacks, reporting weaker-than-expected third-quarter earnings which led to a 13% decline. Furthermore, the news of Chevron’s acquisition of independent oil and gas company Hess (HES) in an all-stock transaction weighed heavily on the stock.
In summary, while some stocks thrived during October, others faced challenges. As investors move forward, they will continue to monitor market developments and the Federal Reserve’s actions closely.
Stock Performances in October
Investors in Align Technology stock were disappointed as the company reported disappointing earnings and revenue for the third quarter. In response to weakening demand, management also decided to cut its financial forecasts for fiscal 2023.
As a result, shares of Align Technology fell 39% in October, making it the worst-performing stock in the index for the month. This performance marks the stock’s worst month since October 2018.
On the other hand, Dollar General (DG), a stock that has had a challenging run recently, emerged as the best performer in the S&P 500 for October. The stock saw a gain of 13%, its best month since April 2020.
However, even with this gain, shares of Dollar General are still down 51% year-to-date. The company reported disappointing second-quarter financial results in August and had to cut its financial forecasts for the fiscal year due to inflation and higher interest rates impacting consumer spending power.
The announcement on October 12 that Jeff Owen would be stepping down as CEO and be replaced by Todd Vasos, former CEO of Dollar General, has contributed to turning the stock’s performance around.
In contrast, SolarEdge Technologies (SEDG) was the worst performer in the S&P 500 for October. The stock, along with its rivals, has been affected by a downdraft in the solar industry. The Invesco Solar ETF, which includes SolarEdge Technologies, has experienced a 43% decline in 2023, its worst year since 2016. Rising interest rates and regulatory changes in California have discouraged households from installing solar panels.
On October 19, SolarEdge released preliminary financial data for the third quarter, stating that the results would be lower than expected. Chief Executive Zvi Lando attributed this to substantial unexpected cancellations and delays from European distributors.
The shares of SolarEdge have plummeted 73% this year, with a 42% loss in October alone, marking the stock’s worst month on record.