In a dramatic turnaround, US stocks experienced a much-needed rally on Monday, regaining lost ground after a recent sell-off. Investors eagerly anticipated significant events on the horizon, including the Federal Reserve's policy decision and Apple's upcoming earnings report.

The S&P 500, which had officially entered correction territory, rose by 1.2% at the closing bell, signaling renewed optimism. The Dow Jones Industrial Average surged by over 1.6%, equivalent to more than 500 points, after a drop of 1.2% at its last close. The tech-heavy Nasdaq Composite also finished the day up by approximately 1.2%, finding stability following a week of mixed results for large technology companies.

The spotlight now turns to the Federal Reserve and Apple as they hold the potential to boost market spirits after a challenging few months. With the US job report for October due on Friday, investors eagerly awaited the central bank's decision on interest rates. Expectations heightened after a surge in the Fed's preferred inflation metric, which suggested an inclination towards maintaining their "higher for longer" stance by keeping interest rates steady.

Apple, the largest company on the S&P 500, is set to release its quarterly results on Thursday, drawing attention to any potential impact resulting from China's recent efforts to restrict the use of iPhones within its borders.

Market watchers are closely analyzing McDonald's earnings, which were announced on Monday, for insight into the strength of the US consumer market. The fast-food giant surpassed earnings estimates for the third quarter, benefitting from higher menu prices and achieving an 8.8% jump in same-store sales. With revenue reaching $6.69 billion, which exceeded estimates of $6.52 billion, McDonald's stock surged by over 2%.

As the Federal Reserve's two-day policy meeting commenced on Tuesday, market observers anticipated a decision to maintain interest rates at current levels. While a rate hike in December remains possible, there is a 75% likelihood of the Fed halting its hiking campaign for the remainder of the year. The recent surge in Treasury yields, with the 10-year yield currently at 4.88%, has already resulted in increased borrowing costs for households and businesses, effectively acting as its own form of rate hike.

In the world of trending stocks, Western Digital saw a 6% rise after the company announced plans to split into two separate publicly traded firms following failed merger talks with Kioxia Holdings. SoFi Technologies experienced an initial 10% increase before settling below the flat line after raising its outlook for the year, projecting profitability in the fourth quarter. However, Tesla shares declined by 4% following a disappointing forecast from automotive chip maker ON Semiconductor, causing concern within the automotive industry.

The surge in the US stock market signals renewed investor confidence as they eagerly await the outcome of the Federal Reserve's policy decision and Apple's earnings report. The combination of these factors, alongside the release of the US job report, promises a crucial week that could further shape the trajectory of the market.