S&P 500 & Dow Jones Industrial Average soared to new heights Friday on the back of strong earnings from major banks. This was a great start for third quarter earnings.
S&P 500 gained 0.5% while Dow climbed by 300 points or 0.7%. The Nasdaq Composite rose 0.3% despite the 7% decline in Tesla’s shares after a disappointing event involving a robotaxi.
The major indices all look set to gain weekly. S&P is up by 1% and will be in green for the fifth week running. The Dow is up 0.9% and the Nasdaq 1.1%.
Banks perform well
Following strong earnings for the third-quarter, major bank shares rose Friday.
JP Morgan Chase shares rose by 4% following the announcement of a profit increase and revenue that exceeded analysts’ predictions.
Wells Fargo’s stock gained 5% on stronger-than-expected profits. Bank of America shares also soared by more than 3%.
Sterling suggested that the outlook could indicate a tendency of lower net income in favour of banks.
In September, the US Federal Reserve cut rates for the first 50 basis point reduction in over four-and-ahalf years.
US Producer Prices Index Stable
Analysts expected that the producer price index (which measures wholesale inflation) in America would be below 0.1% in September.
After the CPI index was above expectations this past week, the producer price index has helped to dispel some fears about a hotter inflation rate in the US.
The US Fed could be prompted to cut rates by 25 basis points at its meeting in November if wholesale inflation continues in the US.
Tesla slides
Tesla shares dropped up to 8% after it launched the long-awaited Robotaxi.
The company has not disclosed any information about its production capacity or how it will manage the regulatory issues.
Morgan Stanley stated that they were “generally disappointed” with the content and details of the presentation. As such, Morgan Stanley expects TSLA will be under pressure after the event.
Gibraltar Industries, a provider of infrastructure and renewable energy solutions, saw its shares fall by nearly 6% Friday. The shares fell on the back of weaker earnings for the third-quarter.
Oil prices fall
Brent crude and West Texas Intermediate crude prices dropped on Friday but will end the week on a positive note.
The rise in oil prices was largely due to supply disruptions and geopolitical tensions that continue in the Middle East.
Brent oil prices were hovering around $80 per barrel on Friday, and traders took profits.
As the oil markets await Israel’s impending retaliation, investors will continue to watch the Middle East situation.
As US president Joe Biden has asked Israel to refrain from such an action, experts believe it’s not in Israel’s best interest to attack Iran’s oil installations.
If Iran’s oil installations are attacked, about 4% or the global crude oil supplies could be lost. In such a situation, prices could increase.
Brent was down by 0.4% to $79.03 a barrel at the time this article was written, and WTI prices were 0.2% less at $75.47.
The post Dow Gains, S&P500 hits record, as Bank Stocks Surge; Tesla Drops 8%, Oil Prices Fall may be updated as new developments unfold.
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