U.S. stocks reached record highs on Friday, fueled by a rally in big banks following positive profit reports. The S&P 500 climbed 0.6% and surpassed its previous all-time high, marking the end of its fifth consecutive winning week. The Dow Jones Industrial Average also set a record, jumping 409 points or 1%. Nasdaq lagged behind with a 0.3% gain due to a slide in Tesla’s stock. Wells Fargo saw a 5.6% increase after reporting stronger profits for the quarter, driven by improved results from its venture-capital investments and higher fees for investment-banking services.
JPMorgan Chase, another major bank, reported a milder drop in profit than analysts had feared, leading to a 4.4% increase in its stock price. CEO Jamie Dimon mentioned that the bank is continuing to buy back shares of its stock, although at a modest pace due to slightly inflated market levels. Investment giant BlackRock also saw a rise in its stock price, up 3.6%, after beating profit expectations for the quarter. The company ended September managing a record $11.5 trillion in total assets for its customers.
While bank stocks were rising, Tesla experienced a significant drop of 8.8%, weighing down the market. The electric-vehicle maker had unveiled its robotaxi, but critics pointed out a lack of details about its rollout plan. In response, potential rival Uber Technologies surged 10.8% and helped lift the S&P 500. Another automaker, Stellantis, experienced a 2.8% decline in its European-traded shares following leadership changes, including the CEO’s retirement and the departure of the CFO. The company, formed by the merger of PSA Peugeot and Fiat Chrysler, is facing challenges in reviving sales in North America.
In the bond market, Treasury yields were mixed after updates on inflation at the wholesale level and U.S. consumer sentiment. While wholesale inflation was slightly higher than expected, consumer sentiment was lower than economists predicted. Traders are anticipating a quarter-point interest rate cut by the Federal Reserve at its next meeting, based on recent data. Despite fluctuations, interest rates are expected to trend downward in the long term, providing support for stock prices. The Fed recently cut its main interest rate and shifted its focus to maintaining economic growth rather than solely combatting inflation.
Overseas, stocks in Shanghai fell 2.5% amid anticipation of a stimulus plan announcement by China’s Finance Ministry. South Korea’s Kospi also dipped after its central bank cut interest rates to boost the economy. The global market remains dynamic and responsive to economic indicators and policy decisions. Investors are closely monitoring developments to assess potential impacts on various sectors and markets.
