- The S&P 500 and the Dow scored record closing highs on Friday, boosted by strong quarterly results from major financial companies like JPMorgan Chase, Wells Fargo, and BlackRock.
- The latest inflation data, including an unchanged Producer Price Index in September, supported expectations for a U.S. Federal Reserve rate cut in November.
- Shares of Tesla fell after the company unveiled its long-awaited robotaxi but did not provide details on production ramp-up or potential regulatory hurdles.
Major financial companies started the earnings season on a high note. JPMorgan Chase stock rallied after reporting higher-than-expected third quarter profits. Wells Fargo shares also rose following better-than-expected earnings. BlackRock gained ground as assets under management hit another record. The strong reports lifted the broader financial sector, making it the biggest boost to the S&P 500 benchmark index.
Producer prices come in below expectations in September
On Friday, the Labor Department reported that the Producer Price Index was unchanged in September on a monthly basis. This was lower than the 0.1% increase expected by economists.
Stocks rise on earnings and inflation data
The S&P 500 gained 0.60% to a new record close, according to preliminary data. The Nasdaq Composite rose 0.33%. The Dow Jones Industrial Average jumped 0.97% to also reach a record high. Stocks were lifted by the strong bank earnings and inflation data supporting expectations for a Fed rate cut in November.
Consumer sentiment dips in October
Meanwhile, the University of Michigan’s preliminary October consumer sentiment reading fell short of estimates, coming in at 68.9 versus 70.8 forecasted.
Tesla weighs on consumer discretionary sector
Shares of Tesla plunged on Friday after the automaker unveiled its long-awaited robotaxi without providing details on production ramp up or regulatory clearance. This dragged down the consumer discretionary sector.
Conclusion
The positive start to earnings season and moderating inflation data boosted stocks on Friday. The Dow and S&P 500 closed at new record highs, led by surging financial stocks after banks posted better-than-expected third quarter results. This helped offset slightly disappointing consumer sentiment and higher jobless claims data.
