All three major U.S. stock indices closed at record highs on Oct. 24 after a better-than-expected inflation report cemented expectations for the Federal Reserve to lower interest rates at its next meeting.
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The Dow Jones Industrial Average rose 472.51 points, or 1%, to 47,207.12, closing above the 47,000 level for the first time. The S&P 500 index added 0.8% to finish trading at 6,791.73, while the Nasdaq gained 1.2% to end the week at 23,204.87. All three stock indices closed at record levels.
Markets surged on news that the September Consumer Price Index (CPI) rose at an annualized rate of 3%, slightly lower than the 3.1% consensus forecast of economists. When excluding volatile food and energy prices, core inflation in America increased 3% on a 12-month basis.
Interest Rate Expectations
The cool inflation data led markets to price in a near 100% chance that the U.S. Federal Reserve will lower interest rates by 25 basis points at each of its two remaining meetings this year, on Oct. 29 and again on Dec. 10.
Hopes that more rate cuts will stimulate economic activity sent bank stocks higher during the trading session, with key names such as JPMorgan Chase (JPM) and Wells Fargo (WFC) each rising more than 2%. Technology stocks also got a lift to end the trading week, with Nvidia (NVDA) leading the way on a 2.25% advance.
Markets largely ignored reports that U.S. President Donald Trump is ending trade negotiations with Canada, the second time he has done so since June of this year.
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