Financial stocks rose sharply after banks reported strong quarterly results, while the latest inflation data raised expectations that the U.S. Federal Reserve would cut interest rates in November, leading to Friday's downturn. The S&P 500 closed at an all-time high.
The Dow Jones Industrial Average rose 409.74 points, or 0.8%, to $42,863.86, above Wednesday's closing high of $42,512. The blue chip hit an intraday high of 42,899.75.
The S&P 500 rose 0.6% to close above 5,800 for the first time. The Nasdaq rose 0.3%.
This week, the S&P 500 rose 1.1%, the Dow rose 1.2%, and the Nasdaq rose 1.1%, marking the fifth straight week of gains for all three companies.
Earnings season for major financial companies began, with JPMorgan Chase & Co. closing 4.4% higher after it reported better-than-expected third-quarter profits and raised its full-year forecast for interest income.
Wells Fargo's profits also beat analysts' expectations, and the stock rose 5.6%. BlackRock shares rose 3.6% after the asset manager reported its assets under management hit a record high for the third consecutive quarter.
Other stocks in the industry also rose broadly, with the S&P 500 Financials Index gaining the most benchmark index points.
“We've had good earnings reports from some of the biggest financial companies, which is a good start to earnings season,” said Evan Brown, portfolio manager and head of multi-asset strategy at UBS Asset Management. He added that this bodes well for the country.
“If the financials are in good shape, this is kind of a soft landing. This is an overall positive sign for the economy and should set a positive tone for other industry earnings releases in the coming weeks.”
Earlier, the Labor Department announced that the final demand producer price index (PPI) for September was unchanged on a monthly basis, compared to the 0.1% rise expected by economists polled by Reuters.
Friday's PPI data follows Thursday's preliminary Consumer Price Index (CPI) figures, which showed weekly new jobless claims to be slightly higher than expected, although the number was higher than expected.
“We're pretty confident that the market will have a soft landing and that inflation will remain moderate, even if yesterday's CPI was a little higher than expected,” said Scott Wren, senior global market strategist at Wells Fargo Investments. . Institute in St. Louis.
“If you look at today's PPI data, core demand and final demand were both a little lower than expected. … Inflation has certainly eased, which is a positive that the market took note of.”
Meanwhile, the University of Michigan's preliminary consumer confidence index for October was 68.9, compared to analysts' expectations of 70.8.
Based on this week's data, traders maintained their predictions that there is about an 88% chance that the Fed will cut rates by 25 basis points at its November meeting and a 12% chance that rates will remain unchanged, the paper said. CME's FedWatch Tool.
During the session, the Consumer Discretionary Index was under pressure from an 8.8% drop in Tesla shares after the EV maker unveiled its long-awaited robotaxi, but the Consumer Discretionary Index was under pressure from an 8.8% drop in Tesla shares after the EV maker unveiled its long-awaited robotaxi, but it was also under pressure from the 8.8% drop in Tesla shares after the EV maker unveiled its long-awaited robotaxi. No further details were provided about whether any additional regulatory hurdles could be addressed.
