U.S. equity indexes experienced a notable rise following the release of positive quarterly earnings from renowned banking giants, which significantly bolstered investor risk sentiment. This upward momentum occurred alongside mixed producer price inflation data that contributed to a decline in government bond yields. As of midday Friday, the Nasdaq Composite had increased by 0.6%, reaching 18,328.6, while the S&P 500 also climbed 0.6% to 5,813.2.
The Dow Jones Industrial Average surged 0.8%, attaining a new level of 42,805.4. Both the S&P 500 and the Dow touched new intraday highs not seen in 52 weeks. Every sector, with the exception of consumer discretionary, saw gains during this intraday rally, particularly in the financials and industrials sectors, which emerged as the standout performers. In particular, JPMorgan Chase reported a surprising year-over-year increase in Q3 earnings, with revenue surpassing market estimates, largely attributed to significant gains from its investment banking operations.
This positive news resulted in a 4.2% surge in its shares during intraday trading, making it the top performer on the Dow. Wells Fargo also outperformed expectations, with its Q3 earnings exceeding forecasts as trading gains and investment banking fees drove noninterest income higher. Its shares experienced an impressive jump of 6.2% intraday, ranking as the third-largest gainer on the S&P 500. In the bond market, the majority of U.S.
Treasury yields decreased intraday, with the 10-year yield falling by 1.5 basis points to 4.08%, and the two-year rate declining by 4.8 basis points to 3.96%. On the economic front, the U.S. Producer Price Index remained steady in September after a 0.2% increase recorded in August, which was slightly above the 0.1% rise anticipated in a Bloomberg survey.
When excluding food and energy prices, the core PPI increased by 0.2%, aligning with expectations, and marked a decrease from the 0.3% gain seen in the previous month. Year-over-year, PPI rose by 1.8% in September, registering a slowdown compared to the 1.9% rate observed the previous month. Conversely, core PPI evidenced an acceleration to 2.8% year-over-year, up from 2.6% in August. Moreover, the University of Michigan's preliminary consumer sentiment index declined to 68.9 in October, down from 70.1 in September, falling short of expectations which had forecasted an increase to 71.0 as per Bloomberg's survey.
Respondents' one-year inflation expectations rose to 2.9%, up from 2.7% in September, while five-year inflation expectations moderated to 3% from the previous 3.1%. In commodity markets, West Texas Intermediate crude oil slipped 0.2%, with prices settling at $75.66 per barrel..