Softer-than-expected inflation for September reinforced expectations that the Fed will cut rates again next week. Traders brought forward their forecasts, now anticipating a three-quarter-point drop in March instead of April, boosting stocks at the end of the week after a largely directionless period.
At 11:47 a.m., the Dow Jones rose 551.63 points, or 1.18%, to 47,286.24; the S&P 500 gained 61.05 points, or 0.91%, to 6,799.46; and the Nasdaq rose 272.52 points, or 1.19%, to 23,214.32.
The S&P 500 and Nasdaq were on track for their best weekly runs in more than two months, while the Dow Jones had its strongest week in nearly four months.
The interest-sensitive Russell 2000 index rose 1.6%.
Intel rose 0.7% after beating third-quarter earnings estimates. AMD and Micron rose 6.7% and 5% respectively, while Nvidia rose 1.8%. The Philadelphia Semiconductor Index added 2.2% to surpass Monday’s record high. Alphabet rose 2.9% after Anthropic said it would use tens of billions of dollars worth of Google AI chips to train its Claude chatbot. The communication services index gained 1.2%.
Consumer goods maker Procter & Gamble beat first-quarter expectations on strong demand for its beauty and hair care products, sending its shares up 1%.
Financial values also showed a positive impulse, with a gain of 1.2%. Coinbase Global rose 7.9% after JPMorgan upgraded the stock’s rating from ‘neutral’ to ‘overweight’.
“This is more of a relief rally and now markets will focus on other things – the meeting between Presidents Trump and Xi next week and the profits of some big tech companies,” said Douglas Beath, global equity strategist at Wells Fargo Investment Institute.
Five of the ‘Magnificent Seven’ companies, including Apple and Microsoft, will report earnings next week. Disappointing results from Tesla and Netflix weighed on sentiment earlier this week.
Meanwhile, business activity showed a tepid recovery in October. The White House also warned that next month’s inflation figures may not be released due to the government shutdown, now in its 24th day.
TRADE FORCES CONTINUE
Global markets got a breather after the White House confirmed that US President Donald Trump will meet his Chinese counterpart Xi Jinping during his Asia tour next week.
The announcement raised hopes of a breakthrough in the impasse marked by ongoing tariffs and export restrictions.
Yet tensions flared elsewhere. Trump abruptly ended all trade talks with Canada on Thursday after a political ad used the late US President Ronald Reagan’s voice to reject tariffs.
Among other things, Deckers Outdoor predicts that full-year sales will be below Wall Street estimates, sending shares of the Hoka sneaker manufacturer down 12%.
Ford added 10.9% after the automaker’s third-quarter profit beat expectations.
General Dynamics beat expectations for the third quarter, sending its shares up 1.4%.
Alaska Air fell 4.9% after the airline cut its full-year forecast and a technical glitch led to flights being grounded before operations could be restored.
Advancing issues outpaced declining issues by a 3.57-to-1 ratio on the NYSE and by a 2.98-to-1 ratio on the Nasdaq.
The S&P 500 recorded 31 new highs and two new lows over the past 52 weeks, while the Nasdaq Composite recorded 109 new highs and 22 new lows.
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