Wall Street Hits Record Highs as Cooling Inflation Boosts Rate-Cut Hopes

Wall Street surged to record highs on Friday as cooler inflation data strengthened expectations of a faster pace of rate cuts by the Federal Reserve, while solid earnings from Intel kept the rally in AI-linked stocks alive.

Lower-than-expected inflation figures for September reinforced confidence that the Fed will cut rates again next week. Traders have moved their projections forward, now anticipating three-quarters of a point in cuts by March instead of April — giving equities a strong boost at the end of an otherwise directionless week.

At 11:24 a.m., the Dow Jones Industrial Average (.DJI) was up 515.91 points, or 1.1%, at 47,249.67. The S&P 500 (.SPX) gained 67.28 points, or 1%, to 6,805.71, while the Nasdaq Composite (.IXIC) climbed 294.75 points, or 1.29%, to 23,236.55.

The S&P 500 and Nasdaq were on track for their best weekly performance in more than two months, while the Dow was heading for its strongest week in nearly four months. The rate-sensitive Russell 2000 Index (.RUT) also rose 1.6%.

Intel (INTC.O) gained 0.7% after its third-quarter profit beat estimates. AMD (AMD.O) and Micron (MU.O) climbed 6.7% and 5%, respectively, while Nvidia advanced 1.8%. The Philadelphia Semiconductor Index (.SOX) jumped 2.2%, surpassing Monday’s record.

Alphabet (GOOGL.O) rose 2.9% after AI startup Anthropic announced it would use billions of dollars’ worth of Google’s AI chips to train its cloud chatbot. The Communication Services Index (.SPLRCL) was up 1.2%.

Consumer goods giant Procter & Gamble (PG.N) gained 1% after beating first-quarter estimates, driven by strong demand for its beauty and hair-care products. Financial stocks (.SPSY) also added 1.2%, while Coinbase Global (COIN.O) jumped 7.9% after J.P. Morgan upgraded the stock from Neutral to Overweight.

“This is a relief rally,” said Douglas Beath, Global Equity Strategist at Wells Fargo Investment Institute. “Now, the market will shift its focus to other key developments — the upcoming meeting between Presidents Trump and Xi, and earnings from several major tech companies next week.”

Five of the “Magnificent Seven,” including Apple (AAPL.O) and Microsoft (MSFT.O), are scheduled to report earnings next week. Earlier in the week, disappointing results from Tesla (TSLA.O) and Netflix (NFLX.O) had weighed on sentiment.

Meanwhile, business activity showed a mild rebound in October. The White House also cautioned that next month’s inflation data might not be released due to the ongoing government shutdown, now in its 24th day.

Trade Concerns Linger
Global markets found some relief after the White House confirmed that U.S. President Donald Trump will meet Chinese President Xi Jinping during his upcoming Asia tour — raising hopes of easing tensions over rolling tariffs and export restrictions.

However, trade frictions elsewhere persisted. Trump abruptly ended talks with Canada on Thursday after a political ad used the late U.S. President Ronald Reagan’s voice to criticize tariffs.

Among other movers, Deckers Outdoor (DECK.N) plunged 12% after forecasting full-year sales below Wall Street expectations, weighing on the maker of Hoka sneakers. Ford (F.N) rallied 10.9% after reporting stronger-than-expected third-quarter profits, while General Dynamics (GD.N) rose 1.4% on upbeat earnings.

Alaska Air (ALK.N) fell 4.9% after the airline cut its annual outlook and temporarily suspended flights following a tech outage.

On the NYSE, advancers outnumbered decliners by a 3.57-to-1 ratio, while on the Nasdaq, the ratio stood at 2.98-to-1. The S&P 500 posted 31 new 52-week highs and two new lows, while the Nasdaq Composite recorded 109 new highs and 22 new lows.