US Stock Market prediction for Monday, October 5: S&P 500, Nasdaq, Dow Jones, Russell 2000 investors eye positive trading today, top stocks to watch out

U.S. Stock Market indexes were in green in the pre-market trading ahead of Monday's regular working hours at Wall Street. S&P Futures were up by 7,788.00, 10.75 points or 0.14 per cent, Dow futures jumped 51,502.00, 25.00 points or 0.05 per cent, Nasdaq Futures at 31,181.00, up by 119.25 points, 0.38 per cent, Russell 2000 futures rose 2,853.60, 2.70 points, 0.09 per cent.

Markets face a busy end of 2026, with the start of corporate earnings season and a pivotal Federal Reserve meeting in coming weeks, along with the looming November 3 midterm elections that will decide control of the US Congress.

Wall Street Faces Monday Test


Investors head into a part of the calendar that tends to be upbeat for US stocks, but that seasonal strength is under threat from a number of challenges, including a surge in bond yields and the market's apparent dependence on massive AI spending.

As the fourth quarter kicks off, the stock market is already on pace for a solid year. The benchmark S&P 500 as of Friday had gained nearly 13 per cent in 2026, and sat about 1 per cent below its mid-August record high.

Since 1945, the S&P 500 averaged an increase of 4.2 per cent in the fourth quarter, with the index posting gains 85 per cent of the time, according to research firm CFRA. That average percentage rise is more than twice that of the other three quarters.

Fourth quarters of midterm years have generally been even stronger, with an average gain of 6.4 per cent, as stocks "benefit from the lifting of election uncertainty," Sam Stovall, chief investment strategist at CFRA, said in a note.

While fourth quarters tend to shine, mid-term years overall historically have been subpar, a trend stocks have defied so far in 2026. The S&P 500 has averaged a 15 per cent dip in midterm years historically, while the deepest drop so far this year has only been 9 per cent, according to McMillion of the Wells Fargo institute.

Top Stocks to Watch Out

PepsiCo and Delta Air Lines are among the handful of large companies set to post third-quarter results next week, before major banks kick off the reporting season more broadly the following week.

This year, corporate profits have surpassed already-lofty projections, propelling the stock market's rally. But they have also raised the bar for stellar performance that could test the market. S&P 500 companies overall are expected to have increased earnings by more than 30 per cent in the third quarter from a year earlier, according to LSEG IBES data.

Particularly important are developments related to the massive spending by AI hyperscalers to build out infrastructure, which has lifted profits at a wealth of companies.

The US stock market's performance has been highly correlated to the AI theme, said Nelson Yu, head of equities at AllianceBernstein. As it relates to AI this upcoming earnings season, "the number one thing to watch for is capex revisions from the hyperscalers," Yu said. "Because that does kind of start the whole chain."