On Friday, the Dow Jones Industrial Average and the S&P 500 set new all-time highs following post-earnings rallies in shares of JPMorgan Chase and Wells Fargo. The Dow jumped 1% to reach 42,863.9, while the S&P rose 0.6% to 5,815, surpassing the 5,800 mark for the first time. The Nasdaq Composite saw a more modest increase, climbing 0.3% to 18,342.9.
Financials led the sector gainers, while the technology sector remained largely unchanged. Notably, consumer discretionary emerged as the sole decliner for the trading session. Over the past week, the Dow recorded a 1.2% rise, with both the S&P 500 and the Nasdaq adding 1.1%. In corporate news, shares of JPMorgan experienced a remarkable rise of 4.4%, making it the biggest gainer on the Dow, spurred by unexpected growth in the company’s Q3 earnings and revenue that exceeded market expectations, driven by robust performance in investment banking. Similarly, Wells Fargo shares surged 5.6%, positioning it as the fourth-largest increase on the S&P 500.
The bank’s Q3 earnings also surpassed expectations, bolstered by strong trading gains and increased investment banking fees, which contributed to a higher noninterest income. Fastenal’s third-quarter results exceeded Wall Street forecasts, despite the company facing sluggish demand in its end markets.
The shares soared by 9.8%, marking the top gain on the Nasdaq. In contrast, Tesla shares experienced a decline of 8.8%, the largest drop on the Nasdaq. During a presentation late Thursday, the electric vehicle manufacturer revealed prototypes of a two-seat autonomous vehicle named Cybercab and a larger 20-person vehicle dubbed Robovan.
However, the event fell short of delivering critical details and updates on several key aspects, as noted by analysts at Morgan Stanley and Oppenheimer on Friday. In the bond market, the US two-year yield decreased 5 basis points to 3.95%, while the 10-year yield fell 1 basis point to 4.09%. Economic news highlighted a flat reading in US producer prices sequentially for September, with the annual metric exceeding market expectations, according to data from the Bureau of Labor Statistics.
On the previous Thursday, the bureau reported that September consumer inflation increased more than anticipated, both compared to the previous month and the same year earlier. Stifel emphasized in a Friday note, "A hotter-than-expected read on both consumer and producer inflation is unwelcome for the Federal Reserve, which is still grappling with the challenge of reinstating price stability." Currently, markets are pricing in an 89% probability that the Federal Open Market Committee will opt for a 25 basis point reduction in interest rates next month, with the remaining probability leaning towards the maintenance of current monetary policy. Consumer sentiment in the US has decreased thus far this month, while year-ahead inflation expectations have risen, according to preliminary findings from the University of Michigan's Surveys of Consumers. In commodities, West Texas Intermediate crude oil experienced a slight decline of 0.4%, settling at $75.55 a barrel.
In contrast, gold prices rose by 1.3%, reaching $2,673.10 per troy ounce, while silver increased by 1.7% to $31.77 per ounce..