Stock Market Today: Stock Rally Continues; Twitter Soars on Musk U-Turn

blue bird sign outside of Twitter headquarters

(Image credit: Getty Images)

published 4 October 2022

Stocks ran higher for a second straight day, building on Monday's gains which saw the three major indexes each rally more than 2%.

There were two different catalysts behind Tuesday's surge. Both raised hopes that the streak of aggressive Fed rate hikes could end sooner rather than later. One came from the Reserve Bank of Australia, which overnight issued a lower-than-expected rate hike. The other was this morning's Job Openings and Labor Turnover Survey (JOLTS) that showed job openings in the U.S. declined by 10% in August while layoffs edged higher.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

The day's headlines weren't all about global central banks and economic data, though. In single-stock news, Twitter (TWTR, +22.2%) rallied after Bloomberg reported that Tesla (TSLA, +2.9%) CEO Elon Musk will reverse course and go through with his original $44 billion bid to buy the social media company. The two parties were scheduled to go to court later this month after Musk in August accused Twitter of fraud and said he wanted to walk away from the deal.

"It's the latest twist in the dramatic takeover saga, and comes just two days before he was set to be deposed by Twitter's lawyers, raising speculation that 'Team Musk' believe the chances of the court ruling in his favor were slim," says Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. "If Elon Musk loses, it could mean he'd be forced to complete the deal or be made to pay billions or more for breach of contract."

The small-cap Russell 2000 rocketed 3.9% to 1,775.
U.S. crude futures jumped 3.5% to finish at $86.52 per barrel ahead of tomorrow's highly anticipated OPEC+ meeting.
Gold futures gained 1.7% to end at $1,730.50 per ounce.
Bitcoin rose 3.4% to $20,220.13. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Poshmark (POSH) popped 13.1% after the online second-hand apparel marketplace said it will be acquired by South Korean internet firm Naver for $1.2 billion, or $17.90 per POSH share. Today, the stock closed just below here at $17.61. "E-commerce has been one of the toughest sub-groups in our coverage over the past 12-18 months, with the average of our six e-commerce names trading ~80% below their 52-week highs," says Wedbush analyst Tom Nikic (Neutral). "This deal, however, may have created a 'floor' for this beaten-down group. Admittedly, POSH does have some key advantages that make them relatively more attractive to potential acquirers (healthy cash balance, asset-light business model, large user base, 'social network' characteristics, etc.), but some of the other e-commerce names in our coverage look particularly cheap in light of the proposed takeout."
Rivian Automotive (RIVN) soared 13.9% after the electric vehicle (EV) maker said production in the third quarter was up 67% from Q2. The company also confirmed that it is on pace to reach its 2022 goal of building 25,000 vehicles.

A lot can happen between now and the midterm election races, but odds seem increasingly likely for a split Congress – which tends to be the most bullish outcome for the stock market. "Historically, split governments have been the best for equities," says Savita Subramanian, head of equity and quantitative strategy at BofA Securities. "Q4 has seasonally been the strongest quarter (+4.5% on average and positive 81% of the time), particularly in midterm years (+7.7% on average and 86% positive hit rate)."

Topics

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.