US stocks rebounded on Monday following a significant sell-off, as investors looked ahead to a week of major events including the Federal Reserve’s policy decision and Apple’s earnings report. The S&P 500, which had officially entered correction territory, rose 1.2%, while the Dow Jones Industrial Average jumped 1.6% or over 500 points. The tech-heavy Nasdaq Composite also finished the day up around 1.2%. Investors are now focused on the Fed’s decision on interest rates, Apple’s earnings report, and the US jobs report for October. The rise in the Fed’s preferred inflation metric has raised expectations that interest rates will remain steady for now.
The Federal Reserve’s two-day policy meeting is set to begin on Tuesday, and many expect that rates will be kept unchanged. The rapid increase in Treasury yields has led experts and Fed officials to argue for a pause in rate hikes. The spike in long-term interest rates has tightened monetary policy on its own, making a rate hike unnecessary at this meeting. Experts believe that the Fed will hold off on raising rates in November and potentially increase them in December. This outlook has contributed to the positive sentiment in the stock market.
President Biden issued an executive order on Monday aimed at setting new standards for artificial intelligence (AI) and addressing concerns around privacy and safety. The order requires tech companies to evaluate their AI models and conduct safety tests before releasing them to the public. It also aims to protect Americans from AI-generated misinformation and fraud by developing guidance to authenticate AI-generated content. The order serves as an example for other governments and businesses as AI-generated content becomes more prevalent. The executive order is expected to shape AI policies and regulations moving forward.