The Dow Jones Industrial Average fell Monday, giving back some of the strong gains from last week, as Treasury yields rose and investors awaited new earnings reports.

The S&P 500 slipped 0.18% to 5,853.98. The 30-stock Dow lost 344.31 points, or 0.8%, to close at 42,931.60 and snap a three-day run of winning sessions. The Nasdaq Composite was the outlier, rising 0.27% and ending at 18,540.01.

Consumer and homebuilder stocks were among the biggest losers as fears about higher-for-longer interest rates crept up, with Target down 3.8% and Builders FirstSource off 5.2%. Lennar also shed 4.4%.

The yield on the 10-year Treasury jumped, rising nearly 12 basis points to 4.19%.

"Bond yields continue to back up, which implies to me that investors are now thinking that the Fed will be slower to lower interest rates because the economy remains resilient," CFRA chief investment strategist Sam Stovall said. "As a result, the Fed will likely have a harder time pushing the inflation rate down to its target 2% level in the next year or so."

Earnings will be key this week with roughly one-fifth of the S&P 500 set to report. Among the companies on deck are Tesla, Coca-Cola and GE Aerospace.

Thus far, the results have been mixed. Of the roughly 14% of S&P 500 companies that have already posted third-quarter results, better than 7 in 10 have beaten expectations, according to FactSet. Analysts have significantly downgraded their earnings expectations for the quarter in recent months.

"I don't think that we are in the beginnings of an earnings recession or anything like that, but the bar has been set very, very low … rarely does anybody injure themselves falling out of a basement window," Stovall said. "So with earnings this low, chances are that this will be the 60th quarter out of the past 62 in which actual results exceed end-of-quarter estimates."

Still, investors are largely optimistic equities have more room to run, but they are mindful that stretched valuations, particularly ahead of the U.S. presidential election and amid rising geopolitical risks, could also mean further choppiness.

Monday's moves come after both the S&P 500 and 30-stock Dow registered all-time highs on Friday, cementing a sixth straight weekly advance for both benchmarks.

Dow, S&P 500 end Monday in the red

U.S. stocks snapped their recent rally on Monday.

The Dow Jones Industrial Average led the day's losses, losing 344.31 points, or 0.8%. The S&P 500 also closed lower, slipping 0.18%. The Nasdaq Composite rose 0.27%.

— Pia Singh

JPMorgan issues short-term buy call on China electric car stock

JPMorgan sees some near-term catalysts leading to a big rally in Xpeng shares.

Shares rose nearly 2% in morning trading after analyst Nick Lai, who has an overweight rating on the Chinese electric vehicle maker, added Xpeng to the Wall Street bank's positive catalyst watch list in a 17-page report out Sunday. His price target implied roughly 34% upside from the stock's close on Friday.

"In addition to our positive sector stance into the year-end (i.e. 35% QoQ PV growth in 4Q24 vs. seasonality ~20%, click here), XPeng's upcoming new product strategy, advancing in-house technology and solid 3Q earnings as well as strength in 4Q vehicle delivery should altogether support its share price," the analyst wrote.

CNBC PRO subscribers can read more here.

— Sean Conlon

S&P 500 tends to rise after clinching 6-week positive streak, data shows

The S&P 500's recent win streak bodes well for future performance, historical data shows.

The broad index is coming off six straight positive weeks. Since 1950, Carson Group research found a weekly rally of that length has been seen 51 other times.

One year after notching the sixth winning week in a row, the index was up 11.1% on average, per the Carson Group data. It was higher more than 86% of the time.

— Alex Harring

Deutsche Bank raises American Express price target

Deutsche Bank sees a bright future ahead for American Express.

The firm stood by its buy rating for the credit card company but raised its target price to $310 from $270. This updated forecast is approximately 12% above where American Express closed on Friday.

Shares of American Express have soared 48% this year. In part, analyst Mark DeVries attributed this outperformance to the company being "viewed as a safe place to hide in an uncertain macro, but also because the market gained increasing confidence in the durability of its EPS growth algorithm."

Still, DeVries believes the stock is trading at an attractive valuation, and sees even more upside potential if macroeconomic conditions improve.

"The company has demonstrated that 9% revenue growth, when combined with solid operating leverage and healthy share repurchases, is more than enough to generate mid-teens core EPS growth," he said. "We believe that's enough to support a ~20x P/E multiple (slightly above where it trades today), which on our new $15.60 2025 EPS estimate brings our target to $310."

— Lisa Kailai Han

Uncertainty surrounding November election is 'no reason to exit the market,' says UBS

Despite a tight U.S. presidential election remaining too close to call, UBS remains constructive on equities and does not think any uptick in volatility could harm a strong market.

"As neither party holds a clear advantage in any of the key swing states that could decide the outcome, the race remains too close to call, and we expect volatility to pick up in the coming weeks amid elevated uncertainty," UBS Global Wealth Management chief investment officer Solita Marcelli wrote Monday. "But we also think the potential volatility is unlikely to derail positive equity fundamentals, and remind investors not to make dramatic portfolio changes based on expected election outcomes."

— Brian Evans

Consumer data suggests a difficult holiday season ahead

Although Barclays' latest U.S. credit card transactions data indicates a broadly healthy consumer, the firm warns that the end-of-year shopping season may not hold up as well.

"A pullback in median spend on various goods does not bode well for the shopping season," Barclays analyst Renate Marold wrote in a Monday note.

Marold added that the data showed improving loyalty to higher-end retailers and a slowdown in a trade down toward discount retailers.

— Hakyung Kim

Minneapolis Fed President Kashkari sees higher long-run rates

Minneapolis Federal Reserve President Neel Kashkari said Monday he thinks the longer-term trajectory for interest rates could be higher than it has been in the past.

Strong economic growth in the face of an aggressive Fed rate-hiking campaign indicates that the so-called neutral rate that neither pushes nor holds back growth over time is elevated compared to the 2.5% or so rate that Fed officials have long held, Kashkari said.

"We've raised rates a lot, and the US economy has basically absorbed them and still continues to perform quite well, and the labor market has remained strong. That's really good news, but it's a little bit hard to figure," he said during a question-and-answer session in Wisconsin.

"The fact that the economy has been so resilient over the last couple years, tells me, at least right now, the neutral rate seems to be higher," he added.

In their quarterly economic projections, Fed officials have been gradually raising the long-run rate higher, most recently putting it at 2.9% in September.

— Jeff Cox

Leading indicators fell more than expected in September

The Conference Board's Leading Economic Index slid 0.5% in September, more than expected, due in part to a deteriorating global manufacturing picture.

Economists surveyed by Dow Jones had been looking for a reading of -0.3%, which would have matched August's downwardly revised decline. The index measures 10 variables that include manufacturing as well as stock market prices, bond yields and housing-related data.

"Overall, the LEI continued to signal uncertainty for economic activity ahead and is consistent with The Conference Board expectation for moderate growth at the close of 2024 and into early 2025," said Justyna Zabinska-La Monica, the board's senior manager of business cycle indicators.

— Jeff Cox

Small caps struggle

Small-cap stocks saw outsized losses in Monday's session.

The small cap-focused Russell 2000 slid about 1.5% in afternoon trading. The S&P 500 had shed just 0.3%

The Russell 2000 has also lagged this year. It has added under 11% in 2024, while the S&P 500 has climbed more than 22%.

— Alex Harring

Stocks making the biggest moves midday

Check out some of the companies making headlines in midday trading:

• Boeing — The stock climbed 3%. The aircraft maker reached a new contract proposal with its machinists' union, which could end a strike that has been going on for more than a month. The ratification vote is set for Wednesday.
• Warby Parker — The eyeglass maker and retailer gained nearly 6% after Goldman Sachs upgraded shares to a buy from a neutral rating, saying its margin growth potential and solid fundamentals support its "somewhat elevated" valuation.
• Cigna — The insurer's stock slid more than 4% after Bloomberg reported, citing people familiar with the matter, that Cigna has reignited merger discussions with Humana. Bloomberg's sources said the talks are still in early stages. Humana shares were also marginally lower on the heels of the report.

Read the full list here.

— Brian Evans

Real estate drops 2%, leads S&P 500's decline

All 11 S&P 500 sectors dropped during midday trading Monday, led to the downside by a 2% drop in the real estate sector.

Prologis led the slump, shedding about 3.7%, while Extra Space Storage and Public Storage fell about 3% each. All stocks in the sector were in negative territory.

Health care, consumer discretionary, financials and industrials fell at least 1% each. Information technology slipped 0.1% and was the best-performing sector in the broad index.

— Samantha Subin

AppLovin price target bumped 75% to $210 at Bank of America

Marketing technology software provider AppLovin is now expected to reach $210 over the next year, up from a prior forecast of $120, according to a 21-page report Monday from Bank of America analyst Omar Dessouky. The new target implies 45% further upside for AppLovin versus Friday's close.

AppLovin is "joining the pantheon of at-scale MarTech, AI, and growth stocks," and the stock's valuation is too low for a core business that is "growing 20% sustainably," BofA said.

"We believe that the 2Q23 launch of Axon 2.0, AppLovin's AI engine, ushered in a growth and profitability transformation, which markets and the Street have been slow to recognize," Dessouky wrote. "Thus, we re-envision APP as a growth stock."

BofA, which said its "forecasts remain significantly above consensus," and are the "highest on Street by a wide margin," expects AppLovin to sell for 18 times 2026 EBITDA rather than an earlier projection of 16 times, and raised its software revenue estimate by six percentage points for 2025 and three percentage points for 2026 "based on increased confidence in the core business, mobile game ads."

— Scott Schnipper

433 S&P 500 decliners

The S&P 500 pullback Monday was broad based, with 433 stocks last declining in the broader index.

Real estate and consumer discretionary stocks suffered the biggest drops, with the sectors sliding about 2% and 1%, respectively. Health care was the third worst-performing sector, off by 1%.

On the stock level, Monolithic Power Systems was the biggest laggard in the broad market index, down 5.3%. Shares of health-care company Cigna Group were the second-worst decliner, sliding 4.5%.

On the other hand, Nvidia was a notable outperformer, up 1.7%.

— Sarah Min

Defense ETF hits intraday all-time high

The iShares U.S. Aerospace & Defense ETF (ITA) hit a fresh intraday all-time high Monday, going back to its inception in 2006.

The defense exchange-traded fund got a boost from Boeing and Spirit AeroSystems, both of which outperformed during midday trading.

Boeing shares gained 4%, on pace for its best day since August after the aircraft maker and the machinists' union reached a new contract proposal. At the same time, shares of Spirit AeroSystems, a supplier for Boeing, popped 4.9%.

— Sarah Min, Gina Francolla

Goldman forecasts just 3% S&P 500 annual return over the next decade, down from 13% the last

The S&P 500 will generate miniscule return over the next decade given today's high concentration in just a few stocks and a lofty starting valuation, Goldman Sachs' equity strategy team forecast.

The broad market index will produce an annualized nominal total return of just 3% the next 10 years, according to the team led by David Kostin, which would rank in just the 7th percentile of 10-year returns since 1930. That forecast falls far short of the booming gains from the last one, as the S&P 500 returned 13% annually the last 10 years, above the long-term average of 11%, Goldman noted.

The broad-market index has gained nearly 23% year to date.

For more on Goldman's bearish long-term forecast, read here.

— John Melloy, Pia Singh

Stocks open lower on Monday

Stocks kicked off a fresh trading week in the red.

Shortly after 9:30 a.m. ET, the S&P 500 and Nasdaq Composite slipped 0.1% and 0.2%, respectively. The Dow Jones Industrial Average hovered just below flat.

— Pia Singh

Dallas Fed President Logan backs 'gradually' reducing interest rates

Dallas Federal Reserve President Lorie Logan said Monday she backs the current move to lower interest rates but cautioned that a patient approach will be needed.

"If the economy evolves as I currently expect, a strategy of gradually lowering the policy rate toward a more normal or neutral level can help manage the risks and achieve our goals," Logan said in remarks for a speech in New York. "However, any number of shocks could influence what that path to normal will look like, how fast policy should move and where rates should settle. In my view, the [Federal Open Market Committee] will need to remain nimble and willing to adjust if appropriate."

Along with her views on rates, Logan also backed reducing the Fed's bond portfolio, and said the two operations — easing rates while reducing the balance sheet — are not at odds with "normalizing" monetary policy.

— Jeff Cox

Boeing, Humana among the stocks making moves premarket

These are some stocks making big moves in premarket trading:

• Boeing — Shares added 3.3% after the aircraft maker and its machinists' union reached a new contract proposal that could end a monthlong strike. The ratification vote on the proposal, which includes a 35% wage increase, is expected Wednesday.
• Warby Parker — The eyeglass retailer advanced nearly 5% on the heels of a Goldman Sachs upgrade to buy from neutral. Goldman said the company can outperform as fundamentals improve and margins see stronger growth.
• Humana, Cigna — Shares of both companies moved in opposite directions after Bloomberg, citing people familiar with the matter, reported that Cigna resumed merger talks with Humana. The talks are in early stages, according to Bloomberg sources. Humana gained more than 4%, while Cigna fell a similar amount.

Read here for the full list.

— Sean Conlon

Bernstein lowers price target for ASML, still sees 13% upside

Normalizing China demand could pose a near-term threat for ASML, according to Bernstein.

The firm reiterated its outperform rating on the Dutch semiconductor stock, but lowered its price target to $815 from $1,052. This revised price forecast is still approximately 13% higher than where shares of ASML closed on Friday.

ASML stock has slipped 4% this year. Analyst Sara Russo believes that investors have punished the stock unfairly.

"The recent de-rating has been more pronounced vs. history, with ASML now trading at a trough multiple1SD below historical average, which we believe is overdone," she said. "ASML is now trading at a discount to the SOX, which we find to be unmerited given our belief that the structural story remains strong."

While the firm has recently cut down its 2025 guidance after a "transitional" 2024, Russo wrote that normalizing China demand could mean investors still "need to exercise patience until the cyclical recovery is clearer."

"We had held concerns about the risk of an even more prolonged recovery in end demand resulting in delays to capacity expansion, and that's where we now seem to be going into 2025," she wrote.

On the bright side, Russo said that she models recovery for the stock in 2026.

— Lisa Kailai Han

Loop Capital upgrades JD stock to buy from hold

Loop Capital sees JD.com as a potential beneficiary of China's newly announced stimulus initiatives.

The firm upgraded shares of the Chinese e-commerce retailer to buy from hold. Analyst Rob Sanderson raised his price target to $49 from $48, corresponding to upside of about 23%.

JD will report its third-quarter earnings results after the market closes on Oct. 30. Sanderson thinks the firm will likely exceed all of its current estimates.

"We are comfortable with acceleration to 4% revenue growth for 3Q driven by a strong September with government-sponsored trade-in rebates boosting sales of home appliances and consumer electronics products. We expect an inline-to-better bottom-line result for 3Q," he wrote.

Sanderson also said his topline outlook will prove conservative and highlighted JD management's cost-savings efforts through the consumption spending downturn. Meanwhile, the analyst also cited the Chinese central bank's new stimulus efforts as an additional catalyst.

"We think that JD would likely be an outsized beneficiary of consumption stimulus," he wrote.

Shares of JD have soared 38% in 2024.

— Lisa Kailai Han

Barclays downgrades UPS on near- and long-term headwinds

Barclays is a no-go on UPS.

The bank downgraded the shipping stock to underweight from equal weight. Analyst Brandon Oglenski left his price target of $120 unchanged, implying that shares of UPS could slide 12% from their Friday close.

In the near term, Oglenski sees risks to UPS' earnings that could mean the company is unable to meet "management's rather aggressive back half 2024 guidance." Over the long run Amazon poses a sizable threat, since it still represents 12% of total UPS revenue.

"With the ecommerce provider operating a delivery network that rivals the size of UPS, we see insourcing risk remaining a large overhang in the years to come, especially as UPS attempts to extract higher pricing from the business," the analyst wrote.

Oglenski added that since UPS significantly increased its dividend during the pandemic, he sees a "limited ability" for dividend growth in the next few years. UPS' valuation could be further constrained due to mounting competitive pressures from the non-union FedEx.

"Investors should consider future competition from a merged FedEx US Express and Ground non-union operation, potentially rivaling or exceeding productivity of UPS, which will be constrained on a relative basis by union work rules as well as contracted wages and benefits," the analyst wrote.

Shares of UPS are down nearly 14% on the year.

— Lisa Kailai Han

European markets open slightly lower

European markets opened slightly lower on Monday.

The pan-European Stoxx 600 traded down 0.1% shortly after the opening bell, with most sectors in negative territory.

— Sam Meredith

Where earnings stand

Of the 14% of S&P 500 companies that have posted results thus far this earnings season, 79% of them have exceeded expectations, as of Friday's close, according to FactSet.

But companies are picking up the pace this week. Roughly one-fifth of S&P 500 companies are set to report results Monday through Friday.

— Sarah Min

Leading indicators due out Monday

Leading indicators for the month of September is due out Monday, at 10 a.m. ET.

Economists polled by FactSet expect it to show a 0.3% decrease last month, down from a 0.2% dip in the prior reading.

— Sarah Min

Stock futures open little changed

Stock futures opened little changed Sunday night.

Dow Jones Industrial Average futures rose by 36 points, or 0.08%. S&P 500 futures and Nasdaq 100 futures climbed 0.09% and 0.08%, respectively.

— Sarah Min