Stocks rally and Dow closes above 47,000 for first time after cooler-than-expected inflation report

By John Towfighi, CNN

New York (CNN) — Better-than-expected inflation data Friday morning sparked an end-of-week rally in stocks, sending the Dow, S&P 500 and tech-heavy Nasdaq Composite soaring to fresh record highs.

The Dow gained 473 points, or 1.01%, and closed at 47,207.12. The blue-chip index closed above 47,000 for the first time ever.

The broader S&P 500 climbed 0.79%. The Nasdaq gained 1.15%. Wall Street’s fear gauge, the VIX, sank 5%.

Wall Street sentiment got a boost Friday after Consumer Price Index data for September showed annual inflation heated up in September but less than expected.

That boosted expectations that the Federal Reserve will cut interest rates at its upcoming policy meetings next week and in December. Fed rate cuts can lower savings and borrowing rates, encouraging spending and investing and boosting business activity, creating a sustained tailwind for the stock market.

Meanwhile, corporate earnings continue to impress Wall Street. Ford shares (F) rose 12% on Friday and had their best day since 2020 after the automaker posted strong third-quarter earnings results.

“When the Fed is lowering rates and earnings are good, markets don’t go down very much,” said Bob Doll, chief executive officer at Crossmark Global Investments. “That’s where we find ourselves.”

“Earnings drive stocks, and earnings have been pretty good,” Doll said.

The S&P 500 and Nasdaq posted their best week since early August. The Dow posted its best week since early July.

“With the Fed cutting rates — and this report does nothing to stop them from a [quarter-point] cut next week — and corporate profits continuing to increase, it’s hard to see an interruption of this year’s bull market,” Chris Zaccarelli, chief investment officer at Northlight Asset Management, said in an email.

Investors next week will be attuned to a slate of corporate earnings from companies including Microsoft (MSFT) and Apple (AAPL). US-China trade will also be in focus as President Donald Trump and Chinese leader Xi Jinping are expected to meet at the Asia-Pacific Economic Cooperation summit in South Korea.

The-CNN-Wire
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