Ten Stocks to Watch This Week

The coming trading week has some investors on edge in the face of earnings reports and looming rate hikes.

Despite some turbulence—and in some cases, because of it—this week, there are some stocks to keep a watchful eye on.

Chevron Corp. and Hess Corp. top the list, with Chevron entering into a $53 billion all-stock acquisition of Hess. Also, large-cap growth stocks like Tesla, Nvidia Corp., and Palantir Technologies, Inc. are seeing a downside move, potentially setting the stage for investors to "buy the dip."

Shares of EngageSmart saw an uptick following the report of a potential acquisition by Vista Equity Partners.

In light of last week's market tremors, eyes are now firmly fixed on a slew of corporate earnings reports slated for release this week from tech giants, including Google's parent company Alphabet, Inc., Microsoft, Inc., Meta Platforms, Inc., and Amazon, Inc. These reports, expected in the initial half of the week, are likely to offer a glimpse into the corporate earnings landscape amidst the prevailing economic uncertainties.

S&P Opens Lower

The broad market S&P 500, an index that tracks the performance of 500 of the largest companies listed on exchanges in the United States, opened the trading week lower, painting a less-than-rosy picture for the week ahead.

Investors are troubled by surging bond yields, with the 10-year Treasury note yield cresting the 5 percent mark, reflecting market expectations of more interest rate hikes. Despite futures markets anticipating a pause at the next Federal Reserve meeting, high yields remain a concern.

Looking back at the week ending on October 20, major stock indices dipped due to strong economic data driving bond yields higher, alongside discouraging earnings reports from giants like Tesla, Inc., heightening corporate profit growth concerns amidst economic uncertainties.

The Nasdaq Composite Index, which tracks almost all stocks listed on the Nasdaq stock exchange, and the S&P 500 both sunk for the fourth consecutive session, retreating to their lowest ebb since early June. The Dow Industrials, which tracks 30 prominent companies listed on U.S. exchanges, also lost footing for a third consecutive session, ending at its lowest in over two weeks.

Anticipated economic data, including the preliminary third-quarter GDP read and September's personal income and spending report, set for release later this week, could provide crucial insights for traders ahead of the Federal Open Market Committee meeting, especially concerning inflation.

Despite rate turbulence, the strong labor market is seen as a cushion for the real economy. Brad McMillan, chief investment officer for Commonwealth Financial Network, told Newsweek that while the financial adjustment to higher rates is undeniably painful, the availability of jobs and real wage growth are aiding the average person through it.

He noted that although the rate turbulence is real, growth continues, painting a not-so-dire picture for the economy.

As investors gear up for a week filled with economic landmines, the enduring narrative of growth amidst rising interest rates could provide a sliver of optimism. What's more, economic data and earnings reports from industry giants highlight the role a strong labor market plays in shielding the real economy from the shocks of financial market swings.

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