Key Points
- U.S. stocks surged on Friday after a soft inflation report. The data has increased the likelihood of more Federal Reserve rate cuts this year.
- The White House confirmed that President Trump will meet with China’s President Xi next week.
- Intel’s stock jumped after the company beat profit expectations.
- Oil is set for a big weekly gain, while gold is headed for its first weekly loss in ten weeks.
U.S. stocks surged on Friday after new inflation data came in softer than expected, a “benign” reading that has solidified Wall Street’s bets on more interest rate cuts from the Federal Reserve this year.
At 10:04 AM (ET), the U.S. stock market was rallying strongly, with all three major indices posting significant gains in mid-morning trading. The S&P 500 was trading at 6,797.81 USD, up 0.88%. The tech-heavy Nasdaq 100 was leading the charge, rising 0.94% to 25,333.30 USD. The Dow 30 also contributed to the market’s positive momentum, rising 0.85% to 47,133.20 USD.
The much-anticipated Consumer Price Index (CPI) report, delayed by the government shutdown, showed inflation holding steady at around 3%. This is a welcome sign for investors hoping the Fed will have enough room to cut rates at its meeting next week and again in December. “With headline and core close to 3.0%, the Fed can cut and signal more easing ahead,” said one analyst.
Adding to the positive mood, the White House confirmed that President Trump will meet with Chinese President Xi Jinping next week at the APEC summit in South Korea. The news of renewed dialogue between the world’s two largest economies has raised hopes of de-escalating the recent trade tensions.
In company news, Intel’s stock jumped after the struggling chipmaker beat profit expectations, a positive first step after a recent flurry of major investments from the U.S. government, Nvidia, and SoftBank. Ford also posted strong results, thanks to high demand for its SUVs and trucks.
Meanwhile, in the commodity markets, oil prices were on track for a big weekly gain, driven by new U.S. sanctions on Russia’s two biggest oil companies. Gold, on the other hand, was headed for its first weekly decline in ten weeks as investors took some profits off the table after its recent record-breaking rally.
