NEW YORK, Oct 24 – Wall Street closed out the week on a triumphant note as all three major U.S. stock indexes reached record highs. The market rally was driven by cooler-than-expected inflation data and strong corporate earnings, signaling renewed optimism among investors ahead of the Federal Reserve’s anticipated interest rate decision next week.
The S&P 500 and Nasdaq both posted their largest weekly percentage gains since August, while the Dow Jones Industrial Average recorded its biggest weekly jump since June. Investors appeared to breathe a sigh of relief after new data showed that inflationary pressures were beginning to ease, strengthening the case for a rate cut that could stimulate further market growth.
Cooling Inflation Strengthens Confidence
The Labor Department’s September Consumer Price Index (CPI) revealed that prices rose slightly less than forecast, providing evidence that inflation, while still elevated, is showing signs of moderation. This development helped calm market fears of inflation spikes potentially driven by tariff effects or supply chain disruptions.
Economists now widely expect the Federal Reserve to approve a 25-basis-point interest rate cut during its upcoming policy meeting. The decision would mark another step in the central bank’s ongoing efforts to balance inflation control with economic growth.
Market analysts noted that the softer CPI figures were a welcome relief amid limited economic data releases during the ongoing government shutdown caused by a congressional budget stalemate. Despite the shutdown’s impact on federal reporting, the CPI data offered reassurance to investors that inflation remains manageable.
Ryan Detrick, chief market strategist at Carson Group, described the data as “a breath of fresh air for investors.” He noted that the CPI report not only supports an imminent rate cut but could also open the door to another reduction later this year. “With inflation cooling and earnings exceeding expectations, we’re setting up for a potentially strong end to 2025,” he added.
Corporate Earnings Drive Market Momentum
The third-quarter earnings season continued to impress, with results surpassing forecasts across several sectors. According to LSEG data, 143 companies within the S&P 500 have reported so far, and nearly 87% have exceeded profit expectations, while 83% have topped revenue estimates.
Analysts now estimate that aggregate S&P 500 earnings will grow 10.4% year-over-year, an improvement from the 8.8% projection at the start of October. These stronger-than-expected results have fueled investor confidence and helped drive the indexes to record levels.
Among the standout performers, Alphabet shares climbed 2.7% after the company expanded its partnership with Anthropic, agreeing to provide up to one million of its AI chips for training Anthropic’s Claude chatbot. The news strengthened Alphabet’s position in the competitive artificial intelligence landscape, drawing enthusiasm from both investors and analysts.
Ford Motor Co. surged 12.2% after reporting quarterly profits that handily beat expectations, while General Dynamics rose 2.7% following strong defense sector earnings. On the downside, Deckers Outdoor fell 15.2% after forecasting full-year sales below Wall Street estimates, and Alaska Air dropped 6.1% as it trimmed its annual outlook.
Coinbase Global saw a 9.8% boost after JPMorgan upgraded the cryptocurrency exchange’s stock from “neutral” to “overweight,” highlighting renewed confidence in digital asset platforms amid steady trading volumes.
Meanwhile, market participants are bracing for another busy week ahead as several tech giants are set to report quarterly results. Meta Platforms (META.O), Microsoft (MSFT.O), Alphabet (GOOGL.O), Amazon (AMZN.O), and Apple—five members of the “Magnificent Seven” group—will take the spotlight. Their earnings could play a decisive role in determining whether the current rally sustains its momentum through the end of the year. Industrial heavyweights like Caterpillar and Boeing are also on the schedule, adding further weight to the upcoming week’s economic narrative.
By the close of trading, the Dow Jones Industrial Average rose 472.51 points, or 1.01%, to 47,207.12. The S&P 500 gained 53.25 points, or 0.79%, finishing at 6,791.69, while the Nasdaq Composite advanced 263.07 points, or 1.15%, closing at 23,204.87.
Market breadth remained strong, with advancing issues outnumbering decliners by a ratio of more than 2-to-1 on both the NYSE and Nasdaq. On the NYSE, 540 stocks hit new 52-week highs, compared to only 53 new lows, while the Nasdaq recorded 124 new highs and 44 new lows.
Trading volume across U.S. exchanges reached 19.04 billion shares, slightly below the 20-day average of 20.75 billion, reflecting consistent market activity despite broader economic uncertainty.
As investors look ahead, the combination of easing inflation, robust earnings, and expectations of a Federal Reserve rate cut has created an optimistic backdrop for the markets. With the year entering its final stretch, many analysts believe that if earnings momentum continues, Wall Street could be on track for a strong finish to 2025.