📈 U.S. Stocks Rally on Inflation Data and Tech Earnings
Wall Street indexes surged to record highs on Friday following cooler-than-expected U.S. inflation data and strong corporate earnings, particularly from the semiconductor and tech sectors. The data fueled investor optimism for faster Federal Reserve rate cuts, lifting major indices across the board.
“It’s quite positive… it clears the way for the Fed to cut rates next week and leads to higher expectations of at least two more cuts by March,” said Eric Gerster, CIO at AlphaCore Wealth Advisory.
U.S. consumer prices in September rose slightly less than expected, prompting traders to bring forward rate cut expectations. The Federal Reserve is set to reduce rates by 25 basis points at its October 29 policy meeting.
Despite the optimism, overall economic activity remains mixed, with a tepid rebound in business activity and ongoing concerns over the government shutdown, now in its 24th day, potentially delaying next month’s inflation data release.
🏦 Index Performance and Market Movers
- Dow Jones Industrial Average: +366.58 points (+0.78%) to 47,101.19
- S&P 500: +53.54 points (+0.79%) to 6,791.75
- Nasdaq Composite: +235.12 points (+1.03%) to 23,176.92
- Russell 2000: +0.9%, reflecting sensitivity to rate changes
Top movers:
- Intel (INTC.O): +4%, beating Q3 profit estimates, boosting AI-related optimism
- AMD (AMD.O): +5.7%, Micron Technology (MU.O): +3.4%, Nvidia (NVDA): +1.9%
- Procter & Gamble (PG.N): +1.1%, strong demand for beauty and hair-care products
- Alphabet (GOOGL.O): +2.4%, after Anthropic announced plans to use Google AI chips
- Deckers Outdoor (DECK.N): -14.4%, full-year sales forecast below estimates
- Ford (F.N): +9.3%, Q3 profit beat expectations
- Alaska Air (ALK.N): -4%, annual forecast cut and tech outage disruption
The Philadelphia Semiconductor Index (.SOX) also hit an all-time high, highlighting investor focus on AI and chip-related stocks.
🌐 Global and Trade Context
Investor sentiment was further boosted by U.S.-China diplomacy, with President Trump set to meet Chinese President Xi Jinping next week, raising hopes of easing trade tensions. Conversely, trade talks with Canada were terminated after a political ad criticizing U.S. tariffs.
🔑 Key Takeaways
- Cooler inflation data has accelerated expectations for Fed rate cuts
- Strong earnings from tech and semiconductor companies propel indices higher
- Government shutdown and trade tensions remain uncertainties for markets
- Advancing stocks outpaced decliners by over 4-to-1 on the NYSE
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