U.S. Stocks Hit Record Highs on Cooling Inflation and Strong Earnings

Wall Street surged to new heights on Friday as cooler-than-expected inflation data and strong corporate earnings lifted all three major U.S. stock indexes to record closes. The S&P 500 and Nasdaq logged their biggest weekly gains since August, while the Dow Jones Industrial Average marked its largest weekly rise since June.

The Labor Department’s Consumer Price Index (CPI) for September showed inflation remained elevated but slightly below analyst forecasts, easing concerns over tariff-driven price pressures. The softer CPI data strengthened expectations for a 25-basis-point interest rate cut when the Federal Reserve meets next week. The report was especially notable amid the ongoing U.S. government shutdown that has delayed many economic releases.

“We got some good news on the inflation front as the benign CPI data opened the door for Fed rate cuts next week and likely in December,” said Ryan Detrick, chief market strategist at Carson Group.

Third-quarter earnings have been outperforming expectations. Of the 143 S&P 500 companies that have reported so far, 87% beat earnings estimates and 83% topped revenue forecasts. Analysts now project overall S&P 500 earnings growth of 10.4% year-over-year, up from 8.8% at the start of October, according to LSEG data.

Tech giants including Meta, Microsoft, Alphabet, Amazon, and Apple are set to report next week, potentially driving further market momentum. On Friday, Alphabet rose 2.7% after Anthropic expanded its deal to use up to one million of Google’s AI chips. Coinbase gained 9.8% following a JPMorgan upgrade, while Ford jumped 12.2% after strong quarterly results.

The Dow climbed 472.51 points to 47,207.12, the S&P 500 advanced 53.25 points to 6,791.69, and the Nasdaq gained 263.07 points to close at 23,204.87.

As investors anticipate a Fed rate cut and more tech earnings, optimism for a strong year-end rally continues to build across Wall Street.