Wall Street Hits Record Highs Amid Cooling Inflation and Strong Earnings
U.S. stock markets surged to record highs on Friday, fueled by softer-than-anticipated inflation data and encouraging corporate earnings. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all closed at all-time highs, indicating positive market momentum ahead of crucial earnings reports and a potential interest rate cut from the Federal Reserve.
Key Market Performance
- Dow Jones Industrial Average: Rose by 472.51 points (1.01%) to close at 47,207.12.
- S&P 500: Increased by 53.25 points (0.79%) to finish at 6,791.69.
- Nasdaq Composite: Jumped 263.07 points (1.15%) to end at 23,204.87.
Cooling Inflation Data
The Labor Department released the Consumer Price Index (CPI) for September, which reflected slightly lower inflation than analysts had projected. This development eased concerns regarding the impact of tariffs on inflation and strengthened expectations for a 25-basis-point rate cut by the Federal Reserve in the upcoming monetary policy meeting.
Ryan Detrick, Chief Market Strategist at Carson Group, commented, “The benign CPI data opened the door for Fed rate cuts next week and likely in December.”
Strong Earnings Reports
Over the past week, the third-quarter earnings season gained momentum, with 143 companies in the S&P 500 having reported their earnings. Current projections indicate a 10.4% year-on-year growth in S&P 500 earnings, an increase from the 8.8% growth expected earlier this month.
Detrick shared further optimism, stating, “We’ve seen 87% of companies beat on earnings and 83% on revenue, justifying the current market rally.”
Upcoming Earnings Highlights
Investors are anticipating significant earnings reports next week from major technology companies, including:
- Meta Platforms
- Microsoft
- Alphabet
- Amazon
- Apple
Market Movers
Alphabet’s shares rose 2.7% after a notable expansion of its partnership with Anthropic, which aims to utilize as many as one million of Google’s artificial intelligence chips for training its Claude chatbot. Ford saw a significant increase of 12.2% after surpassing third-quarter profit estimates, while General Dynamics also exceeded forecasts, contributing to a 2.7% rise in its stock.
In contrast, Deckers Outdoor faced a 15.2% decline after predicting full-year sales below Wall Street’s expectations. Alaska Air’s stock fell 6.1% as the airline adjusted its annual forecast downward.
Market Statistics
The trading day revealed a clear trend in market behavior:
- Advancing issues outnumbered declining issues by 2.18-to-1 on the NYSE.
- 540 new highs and 53 new lows recorded on the NYSE.
- On the Nasdaq, 3,193 stocks rose, while 1,450 fell.
- S&P 500 saw 34 new 52-week highs and 4 new lows.
- Nasdaq Composite recorded 124 new highs and 44 new lows.
U.S. exchange volume reached 19.04 billion shares, slightly below the 20.75 billion average of the last 20 trading days. With the combination of cooling inflation and strong earnings, market participants are positioning themselves for an encouraging end to the year.
