Inflation, Economic Growth for Rest of 2021 Should Be Clearer After October Jobs Report

A week after stocks hit a record high, a slew of financial markers to come this week will help define the state of the U.S. economy as the year draws to a close.

The October jobs report will be released Friday by the Labor Department. Medical giants Pfizer and CVS Health will report earnings results on Tuesday and Wednesday, respectively. Also to come this week is the service sector index for October from the Institute for Supply Management. That sector accounts for the bulk of economic activity and became roiled by the late-summer surge of COVID-19 cases.

Significant recent growth among companies in the S&P 500 index has already been reported, suggesting the economy is moving in a positive direction as the country tries to pull itself out of the pandemic's grip.

However, inflation remains a concern for many Americans who have seen an uptick in costs everywhere from the grocery store to big-box merchants.

The September jobs report also fell well short of expectations. Non-farm jobs increased by 194,000 in the month, more than 300,000 jobs short of projections. At the same time, the unemployment rate fell to 4.8 percent from 5.1 percent, continuing an unclear time for the economy.

For more reporting from the Associated Press, see below.

United States flag on Wall Street
Stocks hit an all-time high to end last week. Markets are expected to react to new economic markers this week, including the October jobs report. Spencer Platt/Getty Images

Stocks wobbled in afternoon trading on Wall Street Monday and hovered around the record highs they set last week.

The S&P 500 inched up 0.1 percent as of 3:27 p.m. Eastern after wavering between small gains and losses. The Dow Jones Industrial Average rose 48 points, or 0.1 percent, to 35,867 and the Nasdaq rose 0.4 percent. The three indexes are on pace for more all-time highs.

Smaller company stocks far outpaced the broader market in a sign that investors were confident about economic growth. The Russell 2000 rose 2.4 percent.

More than 65 percent of stocks in the S&P 500 rose, led by energy companies as the price of U.S. crude oil rose 0.6 percent, adding to a more than 75 percent gain so far this year. Exxon Mobil rose 1.8 percent. A mix of companies that rely on direct consumer spending for goods and services accounted for a big slice of the index's gains. Tesla jumped 7.1 percent and Starbucks gained 3.6 percent.

Losses by technology, communication and health care companies kept the S&P 500's gains in check. Microsoft fell 0.9 percent, Google parent Alphabet slid 2.9 percent and UnitedHealth Group dropped 1.5 percent.

Bond yields rose and helped banks make gains, as they rely on higher yields to charge more lucrative interest rates on loans. The yield on the 10-year Treasury rose to 1.57 percent from 1.55 percent late Friday. Capital One rose 1 percent.

Every major index reached record highs on Friday to cap the broader market's best month in nearly a year. Stocks have been gaining ground for weeks as investors review a steady flow of mostly encouraging corporate earnings.

More than half of the companies in the benchmark S&P 500 index have already reported results. Analysts expect overall profit growth of 36 percent by the time reporting is finished. Another 167 companies within the index will report their results this week.

Rising inflation remains a concern and will likely be persistent, but will probably moderate through the end of the year, said Rod von Lipsey, managing director at UBS Private Wealth Management. Meanwhile, investors have been shifting their focus to earnings and other fundamental measures as they move past the uncertainty of COVID-19.

"Obviously we're waiting to see what the Fed has to say, but there's still plenty of room and capacity for the markets to continue this recovery," he said.