U.S. stocks close higher after cooling inflation data

Alsharq Tribune-Otaify 

U.S. stocks ended higher on Friday after the release of slightly cooler-than-expected September inflation data.

The Dow Jones Industrial Average rose 472.51 points, or 1.01 percent, to 47,207.12, marking its first-ever close above 47,000. The S&P 500 added 53.25 points, or 0.79 percent, to 6,791.69. The Nasdaq Composite Index increased 263.07 points, or 1.15 percent, to 23,204.87. All three major averages finished at record highs.

Six of the 11 primary S&P 500 sectors advanced, with technology and communication services leading the gainers by rising 1.58 percent and 1.27 percent, respectively. Energy and materials led the laggards by declining 1.01 percent and 0.61 percent, respectively.

The September consumer price index (CPI) report, which was delayed due to U.S. federal government shutdown, rose 0.3 percent on the month, bringing the annual inflation rate to 3 percent, according to the Bureau of Labor Statistics.

Both readings came in slightly below economists' expectations of 0.4 percent monthly and 3.1 percent annually, based on a Dow Jones survey. Excluding food and energy, core CPI rose 0.2 percent last month and 3 percent over the past 12 months, also lighter than forecasts of 0.3 percent and 3.1 percent.

Following the CPI release, traders increased their bets that the Federal Reserve will cut interest rates at both of its remaining meetings this year. The probability of a December cut jumped to 98.5 percent from about 91 percent before the data, according to the CME FedWatch tool. Odds for a cut next week remained above 95 percent.

"There was little in today's benign CPI report to 'spook' the Fed and we continue to expect further easing at next week's Fed meeting," said Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management. "A December rate cut also remains likely with the current data drought providing the Fed with little reason to deviate from the path set out in the dot plot."

In corporate news, Intel shares rose 0.31 percent after the chipmaker reported third-quarter revenue that exceeded Wall Street estimates. "We believe we are well-positioned to play a more significant role in AI," said John Pitzer, Intel's head of investor relations.