Wall Street roared to new heights on Friday, fueled by a surge in optimism driven by strong third-quarter earnings reports from major U.S. banks. The S&P 500, a broad gauge of the stock market, soared past 5,800 points, while the Dow Jones Industrial Average, a blue-chip index, climbed above 42,800 points, both hitting record highs.
The stellar performance was ignited by top U.S. financial institutions, kicking off the earnings season with impressive results. JPMorgan Chase & Co., Wells Fargo & Co., Bank of New York Mellon Corp, and BlackRock Inc., all beat analysts’ expectations for profitability. This upbeat performance triggered a rally in financial stocks, propelling the sector to an all-time high. The momentum spilled over to regional banks and the broader small-cap universe, as the SPDR S&P Regional Banking ETF and the Russell 2000, an index tracking smaller companies, rallied by 2.7% and 1.7%, respectively.
While the financial sector celebrated, Tesla Inc., the electric vehicle giant, experienced a dramatic downturn, plunging by 8% – its worst performance in over a month. The decline was attributed to analysts’ concerns regarding the lack of clear business plans for its robotaxi initiative and the absence of updates on its lower-cost production vehicle. This disappointment came after the highly anticipated Robotaxi Day on Thursday.
Meanwhile, on the macroeconomic front, inflation remained a key focus. Following Thursday’s hotter-than-expected Consumer Price Index (CPI) report, Friday’s Producer Price Index (PPI) data also came in above forecasts, indicating a setback in the disinflationary narrative. Despite the inflation uptick, market expectations for a Federal Reserve rate cut in November remained largely unchanged. According to CME’s FedWatch tool, there is still an 85% probability of a 25-basis-point rate cut next month.
In the commodities space, oil prices stabilized after surging 3.5% on Thursday, as no significant developments emerged from the Middle East. Gold advanced 1.2%, while silver gained 1.4%. Bitcoin also experienced notable gains, rising over 3% in response to the strong earnings report from BlackRock, which showed higher-than-expected fund inflows. This positive development suggests a continued institutional interest in cryptocurrencies, bolstering investor optimism.
Key Index Performances:
*
Russell 2000:
2,223.00, up 1.7%*
Dow Jones:
42,727.13, up 0.6%*
S&P 500:
5,807.71, up 0.5%*
Nasdaq 100:
20,259.87, up 0.1%Notable Stock Movements:
*
SPDR S&P 500 ETF Trust (SPY):
rose 0.4% to $578.52*
SPDR Dow Jones Industrial Average (DIA):
rose 0.6% to $427.37*
Invesco QQQ Trust Series (QQQ):
held steady at $492.55*
iShares Russell 2000 ETF (IWM):
rose 1.6% to $220.38*
Financial Select Sector SPDR Fund (XLF):
outperformed, up 1.9%*
Consumer Discretionary Select Sector SPDR Fund (XLY):
lagged, down 0.4%*
Uber Technologies Inc. (UBER):
rose 9.1% in reaction to the dismal Robotaxi event.*
JPMorgan Chase & Co. (JPM):
rose 4.8% in reaction to upbeat quarterly earnings.*
Wells Fargo & Co. (WFC):
up 6.1% in reaction to earnings reports.*
BlackRock Inc. (BLK):
up 2.4% in reaction to earnings reports.*
Bank of New York Mellon (BK):
down 1.8% in reaction to earnings reports.*
Fastenal Company (FAST):
rallied 9.1% after reporting stronger-than-expected earnings.*
