The Dow Jones Industrial Average and the S&P 500 reached unprecedented levels on Friday, buoyed by strong post-earnings performances from JPMorgan Chase and Wells Fargo, both of which saw significant rallies in their share prices. The Dow saw an impressive increase of 1% to close at 42,863.9, while the S&P 500 rose by 0.6% to 5,815, marking its first close above 5,800.
The Nasdaq Composite, while remaining a bit more muted, still posted a respectable gain of 0.3%, closing at 18,342.9. Among various sectors, financials stood out as the top gainers, while technology stocks remained relatively stable. The only sector to experience a downturn was consumer discretionary. Throughout the week, the Dow gained 1.2%, and both the S&P 500 and the Nasdaq increased by 1.1% respectively. In corporate updates, JPMorgan's shares jumped by 4.4%, earning the title of the best performer on the Dow.
This surge followed the bank's third-quarter earnings report, which unexpectedly highlighted a year-over-year increase, alongside revenues that exceeded market forecasts, primarily driven by substantial gains in its investment banking segment. Wells Fargo also experienced a strong performance, ranking among the top gainers on the S&P 500 with a 5.6% rise in shares.
Despite seeing a decline in third-quarter results year-over-year, the lender exceeded market estimates for earnings, thanks to a boost from trading gains and increased fees from investment banking that contributed to a rise in noninterest income. Fastenal's third-quarter results surpassed Wall Street expectations as well, despite the industrial and construction supplies distributor facing overall sluggish demand in its end markets.
The stock soared by 9.8%, making it the second top gainer on the S&P 500 and the Nasdaq. On the flip side, Tesla found itself at the bottom of performance charts on both indexes, with a drop of 8.8%. The electric vehicle manufacturer unveiled prototypes for two new autonomous vehicles dubbed "Cybercab" and "Robovan" on late Thursday, but failed to provide substantial details or updates on several critical aspects, according to analysts from Morgan Stanley and Oppenheimer. In the bond market, the US two-year yield dropped by 4.6 basis points to 3.95%, while the 10-year yield remained relatively unchanged at 4.1%. In notable economic news, the Bureau of Labor Statistics released data indicating that US producer prices remained unexpectedly flat in September, while the annual figures exceeded market expectations. Additionally, the BLS had previously reported an unexpected acceleration in US consumer inflation for the last month, showing increases on both a sequential and annual basis. Stifel analysts commented, "A hotter-than-expected read on both consumer and producer inflation is unwelcome for the Federal Reserve, which is still striving to restore price stability." Currently, markets are projecting a roughly 90% probability that the Federal Open Market Committee will opt for a 25 basis point reduction in interest rates during their upcoming session next month.
The remaining probabilities suggest monetary policy will stay unchanged, based on insights from the CME FedWatch tool. Consumer sentiment in the US has shown a downward trend this month, while inflation expectations for the year ahead have risen, as indicated by preliminary findings from the University of Michigan's Surveys of Consumers. In commodity markets, West Texas Intermediate crude oil saw a minor decline of 0.2%, settling at $75.71 a barrel.
Gold prices climbed by 1.3% to reach $2,672.90 per troy ounce, and silver increased by 1.6% to $31.74 per ounce..