Stocks shot out of the gate Friday and kept climbing into the close as market participants cheered a tame inflation reading that all but confirmed a rate cut at next week's Fed meeting. A round of well-received earnings also lifted sentiment ahead of a busy week of corporate reports.
At the close, the Dow Jones Industrial Average was up 1.0% at 47,207, the S&P 500 was 0.8% higher at 6,791, and the Nasdaq Composite had gained 1.2% to 23,204 – new record highs for all three indexes.
Ahead of the opening bell, data from the Bureau of Labor Statistics showed the Consumer Price Index (CPI) was up 0.3% month over month in September and 3.0% year over year – slower than economists expected.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Core CPI, which excludes volatile food and energy prices, also came in below forecasts.
"The cooler-than-expected CPI confirms what we've seen overall from private data during the government shutdown – little indication that inflation is surging or that the labor market is falling off a cliff," says Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. "For a Fed focused on prudent 'risk management,' that should translate into another rate cut next week, and likely more to follow."
Indeed, according to CME Group FedWatch, futures traders are currently pricing in a 97% chance the central bank will lower the federal funds rate by a quarter-percentage point next Wednesday afternoon. Odds of another rate cut in December have risen to 92% from 73% one month ago.
While delayed from its original reporting date, the BLS released the September CPI today so that the Social Security Administration could calculate the cost-of-living adjustment (COLA) for 2026. But with data collection services still suspended, it's unclear when we'll see the next CPI report.
IBM scores a key quantum-computing win
In single-stock news, International Business Machines (IBM) jumped 7.9% – making it the best Dow Jones stock today – after a Reuters report indicated the tech giant can use Advanced Micro Devices (AMD, +7.6%) chips to run a quantum computing error correction algorithm.
In August, IBM and AMD said they are working together to develop next-generation computers that are capable of solving complex tasks.
And according to Reuters, the ability to use AMD chips to correct quantum-computing errors marks a major step "toward commercializing super-powerful computers."
Quantum computing stocks were in focus on Thursday amid reports that the Trump administration is considering taking a stake in the tech firms. Those media reports were later rebuffed by Commerce Secretary Howard Lutnick.
Ford Motor gains after earnings
Elsewhere on Wall Street, Ford Motor (F) rose 12.2% after the automaker reported higher-than-expected third-quarter results.
"Ford results came ahead of both our and consensus estimates on the back of strong performance in Ford Blue and Pro," says BofA Securities analyst Federico Merendi.
And while the company's guidance drew a lot of attention – Ford lowered its full-year forecast due to the impact from a supplier fire – Merendi acknowledges that "the bottom line is that Ford's business is performing $1 billion ahead of assumptions provided in Q4 2024."
Procter & Gamble (PG, +0.9%), Comfort Systems (FIX, +19.0%) and General Dynamics (GD, +2.7%) all found themselves higher after earnings, as well.
Deckers slumps on soft outlook
Deckers Outdoor (DECK), on the other hand, slumped 15.2% as the shoemaker gave soft full-year sales guidance for its popular Hoka and UGG brands.
"U.S. consumers are beginning to see some price increases," said Deckers Chief Financial Officer Steven Fasching in the company's earnings call. "It is impacting their purchase behavior within the consumer discretionary space," which prompted "a little bit of a reduction" in its outlook.
UBS Global Research analyst Jay Sole doesn't seem too concerned. He reiterated a Buy rating on the consumer discretionary stock, saying he sees "a very good opportunity to buy shares in a growth company significantly undervalued by the market."
Next week's earnings calendar will be a busy one, too, with Alphabet (GOOGL), Amazon.com (AMZN) and Apple (AAPL) among the most notable names reporting.
Related content
- What the Rich Know About Investing That You Don't
- Best Blue Chip Dividend Stocks to Buy for 2026 and Beyond
- How to Invest for Fall Rate Cuts by the Fed
-
3 Ways to Stretch the 2026 Social Security COLA For Your BudgetThree steps retirees can take to stretch the Social Security COLA to fit their budgets.
-
How to Keep Your Charitable Giving Momentum Going All YearInstead of treating charity like a year-end rush for tax breaks, consider using smart tools like DAFs and recurring grants for maximum impact all the year.
-
Uber Takes Aim at the Bottom Lines of Billboard LawyersUber has filed lawsuits and proposed a ballot initiative, in California, to curb settlements it claims are falsely inflated by some personal injury lawyers.
-
Giving Tuesday Is Just the Start: An Expert Guide to Keeping Your Charitable Giving Momentum Going All Year
Instead of treating charity like a year-end rush for tax breaks, consider using smart tools like DAFs and recurring grants for maximum impact all the year.
-
Uber Takes Aim at the Bottom Lines of Billboard Personal Injury Lawyers
Uber has filed lawsuits and proposed a ballot initiative, in California, to curb settlements it claims are falsely inflated by some personal injury lawyers.
-
Dow Slides 427 Points to Open December: Stock Market TodayThe final month of 2025 begins on a negative note after stocks ended November with a startling rally.
-
A Financial Adviser's Health Journey Shows How the 'Pink Tax' Costs WomenFact: Women pay significantly more for health care over their lifetimes. But there are some things we can do to protect our health and our financial security.
-
I'm a Cross-Border Financial Adviser: 5 Things I Wish Americans Knew About Taxes Before Moving to PortugalMoving to Portugal might not be the clean financial break you expect due to U.S. tax obligations, foreign investment risks, lower investment yields and more.
-
What to Make of a Hot IPO MarketThis year's crop of initial public offerings could be even dicier than usual because of a skew toward tech and crypto.
-
How to Position Your Portfolio for Lower Interest RatesThe Federal Reserve is far from done with its rate-cutting regime. This is how investors can prepare.
-
Show of Hands: Who Hates Taxes? The Best Time to Plan for Them Is Right NowBy creating a tax plan, you can keep more of what you've earned and give less to Uncle Sam. Here's how you can follow the rules and pay only your fair share.
