Wall Street posts weekly gains with earnings, inflation data on tap

NEW YORK - Wall Street ended higher on Oct 9 as investors shifted their focus to next week, with third-quarter earnings season set to start and inflation data expected, which could shed light on the Federal Reserve’s next policy decision.

All three major US stock indexes advanced on the day, logging weekly gains. The small-cap Russell 2000, however, ended lower than Oct 2’s close.

“It’s the kind of back-and-forth market we’ve been in where we have the reversal of sentiment around Iran,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “With conflicting headlines coming out of the White House and parties in the Middle East, there’s just no edge there.”

Crude prices initially retreated after President Donald Trump said the US will not launch any attacks on Iran before the midterm elections, adding that talks between Washington and Tehran aimed at ending the market-rattling Iran war were “productive.”

Benchmark Treasury yields edged higher, but remained below Oct 7’s 24-year high.

Third-quarter reporting season begins in earnest next week, with big US banks Wells Fargo, Goldman Sachs, Citigroup, JPMorgan Chase, Bank of America and Morgan Stanley scheduled to release results.

Analysts estimate S&P 500 annual earnings growth of 30.6%, on aggregate, for the July-September period, with energy and technology posting the largest year-on-year earnings growth of 123% and 66.5%, respectively, according to LSEG data.

The mood of American consumers, who shoulder about 70% of the US economy, has soured this month, according to the University of Michigan, with near-term expectations deteriorating to an all-time low.

The Dow Jones Industrial Average rose 423.31 points, or 0.83%, to 51,654.95, the S&P 500 gained 46.15 points, or 0.59%, to 7,811.51 and the Nasdaq Composite gained 172.83 points, or 0.64%, to 27,366.17.

Among the 11 major sectors of the S&P 500, communication services was the lone percentage loser.

AI-related momentum stocks were generally higher, with the Roundhill Magnificent Seven ETF up 1% as the US bull market, largely driven by the AI boom, approaches its four-year anniversary.

“Chips have been this year’s story,” said Michael Monaghan, portfolio manager at Founder ETFs in Dallas. “(It’s) a multi-decade technological change and just at the beginning of whatever’s happening, not at the end.”