Traders work on the floor of the New York Stock Exchange on August 8, 2024.
Brendan McDermidt | Reuters
The S&P 500 And Dow Jones Industrial Average Friday was driven to new highs and ended a successful week as the banking behemoths gave a promising start to the third-quarter earnings season.
The broader index rose 0.61% to 5,815.03, while the Dow rose 409.74 points, or 0.97%, to 42,863.86. Both averages reached new all-time highs and ended in records. The Nasdaq Composite It added 0.33% to end at 18,342.94 and was less than 2% from its all-time high.
“What we’re seeing — and you’re seeing it hit pretty hard today, in a good way — is an expansion of the market,” said Craig Sterling, head of U.S. equity research at Amundi US.
The major averages posted their fifth straight week of gains. The S&P 500 and Nasdaq each rose 1.1%, while the Dow saw a 1.2% gain.
A strong start to the third-quarter earnings season gave stocks a lift. JP Morgan Chase Profits and revenue rose 4.4% after beating expectations Wells Fargo It rose 5.6% on stronger-than-expected gains. Investors ignored disappointing earnings and an 11% decline in net interest income.
“Net interest income was the bellwether for this [a] “Whether the bank is doing well or not,” said Kim Forrest, chief investment officer at Bokke Capital Partners. “Investors recognize that they will make money in good times and bad.”
Wall Street views the banking sector as a barometer of the economy’s health, setting the tone for the rest of the earnings season. However, Forrest notes that they lack visibility into forward guidance, which often affects post steering stock moves.
Stocks also benefited from data that eased fears that inflation had not cooled quickly enough. This included a cooler-than-expected September producer price index reading after the consumer price index rose slightly more than expected. The findings signaled that the Federal Reserve may indeed be reaching a soft landing scenario and reach its 2% target, something Goldman Sachs economists think the upcoming September inflation data may already show.
“Overall, given that inflation has moderated, these numbers have had less of an impact,” said David Russell, global head of market strategy at TradeStation. “The central bank could be on track for another 25 basis points over the next two meetings.”
Fed funds futures trading indicate a 90% chance the Federal Reserve will raise interest rates by a quarter in November. CME FedWatch tool. Central bank policymakers will be closely watching additional data, which will shape their course on rates.
Elsewhere, Tesla Shares fell 8.8% on the back of a lower robotaxi event.
