UPDATE: Wall Street indexes are surging to record highs following cooler-than-expected inflation data that has intensified expectations for imminent rate cuts by the Federal Reserve. This optimistic sentiment is further fueled by strong earnings from Intel, which is boosting confidence in the tech sector.
Just released data shows that US consumer prices rose less than analysts anticipated in September, prompting traders to revise their forecasts to predict three quarter-point reductions in interest rates by March instead of April. “It’s quite positive and clears the way for the Fed to cut rates next week,” said Eric Gerster, chief investment officer at AlphaCore Wealth Advisory.
The Federal Reserve is set to convene on October 29, where a 25 basis point cut is widely expected. Despite this encouraging news, the economic outlook remains uncertain. The White House has warned that next month’s inflation data may not be published due to the ongoing government shutdown, now entering its 24th day.
In early trading on Friday, the Dow Jones Industrial Average soared by 366.58 points, or 0.78 percent, reaching 47,101.19. The S&P 500 climbed 53.54 points, or 0.79 percent, to 6,791.75, while the Nasdaq Composite advanced 235.12 points, or 1.03 percent, to 23,176.92. The rate-sensitive Russell 2000 index also gained 0.9 percent.
Intel’s shares surged by 4 percent after the chipmaker reported third-quarter profits that exceeded expectations, further bolstering the Nasdaq. Other tech giants also saw gains, with AMD and Micron Technology rising 5.7 percent and 3.4 percent respectively. Additionally, the Philadelphia SE Semiconductor Index climbed 1.8 percent, hitting an all-time high.
Consumer goods leader Procter & Gamble exceeded first-quarter estimates, with strong demand for its beauty and hair-care products, resulting in a 1.1 percent rise in its shares. Financial stocks also saw a gain of 1.1 percent overall.
Looking ahead, next week promises to be pivotal as five of the ‘Magnificent Seven’ tech titans, including Apple and Microsoft, are set to announce their earnings. Earlier this week, Tesla and Netflix reported disappointing results, impacting market sentiment.
In international news, global markets found brief stability after the White House confirmed that US President Donald Trump will meet with Chinese President Xi Jinping next week, stirring hopes for reduced trade tensions. However, Trump has halted all trade discussions with Canada following a political advertisement that criticized tariffs.
Among notable stock movements, Alphabet rose 2.4 percent after Anthropic announced plans to utilize Google’s AI chips for its Claude chatbot. Conversely, Deckers Outdoor saw its shares plummet 14.4 percent after forecasting lower-than-expected full-year sales.
“Advancing issues outnumbered decliners by a 4.14-to-1 ratio on the NYSE and 3.24-to-1 ratio on the Nasdaq,”
providing a clear signal of the market’s bullish sentiment. The S&P 500 recorded 25 new 52-week highs and one new low, while the Nasdaq Composite saw 76 new highs and 15 new lows.
Stay tuned as we continue to monitor these developing events and their impact on the markets.
