US equity indexes advanced this week as quarterly earnings from banking giants lifted risk appetite and bets favoring slower monetary policy easing increased. The Dow Jones Industrial Average ended at 42,863.93 on Friday, compared with 42,352.75 a week ago. The Nasdaq Composite closed at 18,342.94 versus 18,137.85 the week prior.
The S&P 500 read was 5,815.03 end-of-play, compared with 5,751.07 a week earlier. Technology, industrials, and financials topped the sector charts. Among the mega-caps, Nvidia, Wells Fargo, and JPMorgan Chase led the pack. JPMorgan's Q3 earnings unexpectedly rose, while also sales topped estimates, buoyed by gains in investment banking.
Consumer spending is relatively healthy, credit trends remain benign, and fee income exceeds expectations with an improving outlook, a Raymond James note said, citing the results. Wells Fargo's Q3 earnings beat estimates as trading gains and investment banking fees helped drive non-interest income higher. The month-over-month headline and core readings from the consumer price index were unchanged in September, but were still hotter than forecast.
From a year ago, the headline rate cooled less than guided, while the core CPI was hotter than anticipated. The month-over-month headline producer price index fell more than forecast in September, while the slowdown in core PPI was in line. From a year ago, the headline rate declined, while the core accelerated. The probability of a 25-basis-point rate cut on Nov.
7 climbed to 90% Friday, from 83% a day ago, as per the FedWatch Tool. The remaining 10% likelihood was for a pause, versus 17% a day earlier, implying a zero probability for a 50-basis-point cut. Israel's security cabinet is yet to agree on its response to Iran's missile attack, CNN reported, citing an unnamed source.
But the gap between the US and Israeli positions was narrowing. US President Joe Biden has said Israel's retaliation should be "proportional.".