Stocks rebound and Dow closes above 47,000 for the first time after colder-than-expected inflation report

new York
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Better-than-expected inflation data Friday morning triggered a stock rally at the end of the weekpropelling the tech-heavy Dow, S&P 500 and Nasdaq Composite to new records.

The Dow Jones 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 index rose 0.79%. The Nasdaq gained 1.15%. Wall Street’s fear index, the VIX, fell 5%.

Confidence on Wall Street strengthened Friday after September Consumer Price Index data showed annual inflation. heated in September but less than expected.

That reinforced expectations that the Federal Reserve would cut interest rates at its upcoming policy meetings next week and in December. Fed rate cuts can reduce saving and borrowing rates, encouraging spending and investment and boosting business activity, creating a lasting tailwind for the stock market.

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

“When the Fed cuts rates and earnings are good, markets don’t fall much,” said Bob Doll, managing director of Crossmark Global Investments. “That’s where we are.”

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

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

“With the Fed cutting policy rates – and this report does nothing to prevent it from cutting them (by a quarter point) next week – and corporate profits continuing to rise, it is difficult to envision a break in this year’s bull market,” Chris Zaccarelli, chief investment officer at Northlight Asset Management, said in an email.

Next week, investors will hear about the results of companies such as Microsoft (MSFT) and Apple (AAPL). U.S.-China trade will also be in focus, as President Donald Trump and Chinese leader Xi Jinping do so. we expect to meet at the Asia-Pacific Economic Cooperation summit in South Korea.