Stocks shook off a shaky start and closed higher on Monday, extending their gains from last week, as investors braced for a heavy week of earnings from big tech companies.

The S&P 500 rose 1.2%, with technology, healthcare and financial stocks accounting for much of the gains. Only stocks in the materials and real estate sectors fell.

The Dow Jones Industrial Average rose 1.3% and the tech-heavy Nasdaq composite closed up 0.9%.

Google’s parent company, along with Facebook’s parent company Amazon and Apple, all released their latest financial results this week. They are among the most expensive stocks in the benchmark S&P 500 and their earnings this week could spell big moves, up or down, for the broader market.

Several large companies outside the tech sector are also reporting earnings this week, including Coca-Cola, General Motors and Caterpillar.

“Generally the market is pulling back and there are a few data points that people are waiting to see,” said Jack Janasiewicz, portfolio manager and lead portfolio strategist at Natixis Investment Managers Solutions.

The S&P 500 rose 44.59 points to 3,797.34. The Dow gained 417.06 points to 31,499.62. The Nasdaq rose 92.90 points to 10,952.61.

Stocks of smaller companies also rose. The Russell 2000 Index added 6.16 points, or 0.4%, to close at 1,748.40.

Bond yields rose slightly. The 10-year Treasury yield briefly jumped to 4.29% before falling back to 4.25%. It reached 4.22% on Friday evening. The two-year Treasury yield, which tends to follow investors’ expectations for Federal Reserve action on interest rates, rose to 4.50% from 4.48%.

Trading has been volatile this month, but major indices are significantly higher at the start of the last full week of October after some big market rallies last week. The S&P 500 is up 5.9% so far this month, while the Dow Jones is up 9.7%. The Nasdaq is up a more modest 3.6%.

Stocks jumped on Friday after remarks by a Federal Reserve bank chairman raised hopes among traders that the central bank may consider easing its aggressive pace of interest rate hikes as trying to curb inflation.

Mary Daly, president of the Federal Reserve Bank of San Francisco, said she was considering the dangers of raising interest rates too high and doing too much damage to the economy. While the Fed probably isn’t ready to start scaling back its rate hikes just yet, it said, “I think now is the time to start talking about quitting. Now is the time to start planning for the resignation.

That optimism likely continued on Monday, helping to keep investors in the mood to buy, said Sam Stovall, chief investment strategist at CFRA.

“The key is interest rates and the Fed,” he said.

Investors are watching the latest round of corporate earnings closely to get a better idea of ​​how inflation is impacting different sectors of the economy. Prices for everything from clothes to food remain at their highest level in four decades. This has pushed companies to raise prices and cut costs, while squeezing consumers.

The Federal Reserve and central banks around the world have raised interest rates in an effort to control inflation. Interest rate hikes have weighed on more expensive stocks, such as technology companies, by making lower-risk bonds more attractive in a volatile stock market.

Higher interest rates also made borrowing more expensive and hit the housing market particularly hard. Mortgage buyer Freddie Mac reported on Thursday that the 30-year average key rate had reached 6.94%. Last year, at this time, the rate was 3.09%. Soaring mortgage rates have crippled a housing sector that has been boiling for years.

The Fed’s aggressive rate hikes have raised fears among economists and investors that the central bank may go too far in slowing the economy and pushing it into a recession. The US economy is already slowing and even contracted in the first half of the year. The government will release its third quarter gross domestic product report on Thursday.

The Fed is expected to raise interest rates by three-quarters of a percentage point at its next meeting in November. Markets are looking for any signs that the central bank is ready to ease rate hikes.

“The market needs to find that terminal rate,” Janasiewicz said. “Once we’re comfortable with that, I think we can start to find some footing.”

European markets made solid gains. UK government bonds rallied as Treasury chief Rishi Sunak secured the post of prime minister, replacing Liz Truss, who resigned last week after her economic tax cut package caused turbulence in the financial markets.

Chinese markets slumped after President Xi Jinping granted himself a new term as head of the ruling Communist Party. The news rocked publicly traded U.S. stocks of some major Chinese companies. Alibaba fell 12.5% ​​and JD.com 13%.

Xi wants the Communist Party to play a bigger role in China’s trade and technology development, raising fears of stunted economic growth due to overly centralized control. China’s economy is also still suffering from strict restrictions related to COVID-19.

Yuri Kageyama and Matt Ott contributed to this report.