Dow, S&P 500 hit all-time highs
The Dow and S&P 500Ā scored record closing highs onĀ Friday, with the big boosts from financialĀ stocksĀ after banks reported strong quarterly results while the latest inflation data fueledĀ expectations for a Federal Reserve rate cut in November.
The Dow Jones Industrial AverageĀ climbed 409.74 points, or 0.8%, to 42,863.86, eclipsing its Wednesday record close of 42,512. The blue-chip touched an intraday record high of 42,899.75.
The S&P 500 gained 0.6% and closed above 5,800 for the first time. The NasdaqĀ was up 0.3%.
For the week, the S&P 500 added 1.1% while the Dow climbed 1.2% and the Nasdaq added 1.1% with all three notching their fifth weekly gain in a row.
MajorĀ financial companiesĀ kicked offĀ earnings seasonĀ with JPMorgan ChaseĀ finishing the session up 4.4% afterĀ the lenderĀ reportedĀ higher-than-expected third-quarter profit and raised its annual interest income forecast.
Shares in WellsĀ FargoĀ rallied 5.6% afterĀ itsĀ profitĀ also beat analystsā expectations. BlackRockĀ stock gained 3.6% afterĀ theĀ asset managerĀ reportedĀ that itsĀ assets under management had hit a record high for the third straight quarter.
OtherĀ stocksĀ in the industry roseĀ broadly, making the S&P 500 FinancialsĀ indexĀ the biggest index points boost for the benchmark.
āWeād some good earnings reports from some leading financial companies. Thatās a good start to earnings season,ā said Evan Brown, Portfolio Manager and Head of Multi-Asset Strategy, UBS Asset Management, adding that it bodes well for the economy.
āWhen financials do well, this is what a soft landing looks like. Itās a positive overall sign for the economy and sets a positive tone for earnings releases in other industries in the next few weeks.ā
Earlier in the day, data from the Department of Labor showed theĀ Producer Price IndexĀ (PPI)Ā for final demand was unchanged on a monthly basis in September, compared to the 0.1% rise expected by economists polled by Reuters.
Fridayās PPI dataĀ followsĀ ThursdayāsĀ Consumer Price IndexĀ (CPI)Ā reading, which was slightly higher than forecast, although weekly jobless claims rose more than expected.
āThe marketās pretty convinced that weāre going to have a soft landing and that inflation, even with CPI being a little bit higher than expected yesterday, is going to be moderate,ā said Scott Wren, senior global market strategist at Wells Fargo Investment Institute in St. Louis.
āIf you look at todayās PPI data, the core and final demand were both a little lower than expected ā¦ Inflationās certainly been moderating and thatās a positive that the market paid attention to.ā
Meanwhile, a preliminary reading of the University of Michiganās October consumer sentiment index stood at 68.9, compared with analystsā estimate of 70.8.
With the weekās data under their belts, traders kept bets steady for a roughly 88% probability the Fed would cut rates by 25 basis points at its November meeting, and a 12% chance it will leave rates unchanged, according toĀ CMEās FedWatch tool.
During the session the consumer discretionary indexĀ was under pressure from an 8.8%Ā slump inĀ shares of TeslaĀ after the EV maker unveiled its long awaitedĀ robotaxi, but did not provideĀ detailsĀ on how fast it could ramp up production or deal with potential regulatory hurdles.