Traders work on the floor of the New York Stock Exchange during morning trading on January 11, 2024.
Angela Weiss | AFP | Getty Images
On Friday, the S&P 500 and Dow Jones Industrial Average hit new highs as giant banks got off to a good start for the third-quarter earnings season.
The general index rose 0.6%, but Dow Earned 400 points (0.9%). The Nasdaq Composite rose 0.3%. tesla The company's stock price plummeted 7% following the disastrous robotaxi event. The tech stock ratio is less than 2% below its all-time high.
“What we're seeing is an expansion of the market, which I think is pretty hard hit in a good way today,” said Craig Sterling, head of U.S. equity research at Amundi US. Ta.
Major stock averages are trending higher each week, with the S&P 500 up 1.1%, on track for its fifth straight week of positive gains. The Dow is up 1.2%, along with the Nasdaq.
A strong start to the third quarter earnings season boosted stock prices. JP Morgan Chase Earnings and revenue exceeded expectations, increasing 5%. wells fargo Shares rose nearly 6% after higher-than-expected profits. Investors overlooked disappointing earnings and an 11% decline in net interest income.
“In the past, net interest income [a] “Whether a bank is doing well or not, investors understand that they can make money in good times and bad,” said Kim Forrest, chief investment officer at Boke Capital Partners. .
Wall Street tends to view the banking sector as a barometer of economic health, setting the tone for the rest of the earnings season. However, Forrest points out that there is a lack of foresight regarding forward guidance, which often influences post-earnings stock price movements.
Beyond profits, Wall Street weighed the latest data to help ease concerns that inflation is not cooling quickly enough. The producer price index, a measure of wholesale inflation, remained unchanged in September, falling below the Dow Jones Industrial Average's forecast for a 0.1% rise. This eased some of the concerns caused by a slightly stronger-than-expected rise in the consumer price index in September.
“Overall, these numbers are becoming less influential as inflation slows,” said David Russell, global head of market strategy at TradeStation. “The Fed could still be on track to reach its 25 basis point target over the next two meetings.”
Federal funds futures trading suggests there is about an 86% chance the Fed will cut interest rates by a quarter of a percentage point in November, the paper said. CME FedWatch Tools. Central bank policymakers will closely monitor additional data that could determine the direction of interest rates.
