Stock Market Update: S&P 500 Closes Above 5,800 for First Time as Banks Rally

Market Update: Dow and S&P 500 Reach Record Highs Amid Strong Earnings

The Dow Jones Industrial Average and the S&P 500 both achieved record closing highs on Friday, with the S&P 500 surpassing the 5,800 mark for the first time. The positive momentum was driven by impressive earnings reports, particularly from JPMorgan.

As of 4:00 p.m. ET, the S&P 500 rose 0.4% to finish at 5,814.75, while the NASDAQ Composite increased by 0.3%. The Dow Jones climbed 409 points, or 1%, closing at an unprecedented 42,863.86. This marks the fifth consecutive week of gains for all three major indexes, with the Dow experiencing its best winning streak in eight months.

Strong Earnings from JPMorgan and Wells Fargo

Friday’s spotlight was on the third-quarter earnings season, with major financial institutions providing insights into the economic landscape, particularly regarding loan demand.

JPMorgan Chase reported a 4% increase in stock value after exceeding quarterly profit and revenue expectations, attributed to higher-than-expected net interest income. Similarly, Wells Fargo saw its stock rise more than 5% after announcing third-quarter earnings that outperformed forecasts, buoyed by reduced expenses and credit costs.

Next week, Goldman Sachs, Bank of America, and Citigroup are set to release their earnings reports.

Tesla’s Cybercab Unveiling Draws Criticism, Uber Rallies

In other news, Tesla’s stock dropped over 8% following the debut of its much-anticipated "Cybercab" robotaxi. Analysts noted that CEO Elon Musk did not adequately address key questions about the technology during the presentation.

Conversely, Uber witnessed a 10% increase in stock price after investors reacted unfavorably to Tesla’s event, with analysts suggesting that the developments benefitted Uber’s outlook.

Stellantis NV, on the other hand, fell 2% after announcing changes in its leadership, including the departure of CFO Natalie Knight and the search for a successor to CEO Carlos Tavares, who is set to retire in early 2026.

PPI Data Indicates Slower Rate Cuts on the Horizon

The producer price index (PPI) for September remained unchanged from August, coming in below expectations for an upturn. Year-on-year, the index experienced a 1.8% increase, which is a slight slowdown from an upwardly revised figure of 1.9% in August. This trend suggests a cooling inflation environment, potentially affecting future monetary policy.

Traders are now anticipating a 25 basis point interest rate cut in November, rather than the larger cut previously expected. Statements from Fed officials, including Atlanta Fed President Raphael Bostic, have indicated consideration of maintaining current rates.

A slower pace of rate cuts may exert pressure on Wall Street, particularly as U.S. stock valuations reach unprecedented heights based on earlier expectations of significant rate reductions.