US Stocks Reach Record High as Soft CPI Data Boosts Tech Mega-Cap Gains
US equities surged on Friday, closing at record highs after a softer-than-expected Consumer Price Index (CPI) report reinforced hopes for potential Federal Reserve interest-rate cuts. The S&P 500 rose 0.8%, driven by gains in six of its eleven sectors, led by technology and utilities, while the Nasdaq 100 climbed 1.0%. The Bloomberg Magnificent Seven Price Return Index added 0.6%, highlighting broad-based tech sector strength.
Tech Giants Lead Market Rally
Major technology companies led the charge, with Nvidia Corp, Apple Inc, and Broadcom Inc posting strong gains. Investor optimism was fueled by anticipation of next week’s earnings season, which includes Alphabet, Meta, Microsoft, Apple, and Amazon.
Citi strategist Scott Chronert noted:
“Next week is critical as the big Tech/AI names start reporting. While early earnings from the 30% of S&P 500 companies that have reported so far are strong, the more significant test to index price action is still ahead.”
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Soft CPI Data Sparks Investor Optimism
The market rallied following the delayed September CPI report, which showed core consumer prices rising only 0.2%, the slowest pace in three months. The report, postponed due to the US federal government shutdown, offered investors a key glimpse into inflation trends.
“Today’s CPI number offered investors the first tidbit of information from the barren wasteland of government data since the shutdown started October 1,” said John Kerschner, Global Head of Securitized Products at Janus Henderson.
Citi economist Veronica Clark emphasized that the slowing shelter inflation could persist into 2026, potentially offsetting stickier goods prices and tariffs, further supporting equities.
US-China Trade Talks and Macro Developments
Investor focus also shifted to US-China trade discussions in Malaysia, where Treasury Secretary Scott Bessent met Chinese Vice Premier He Lifeng. These talks precede a pivotal Trump-Xi summit, which could influence global markets.
Individual Stock Highlights
Alphabet Inc rose 2.7% after announcing a multi-billion dollar AI chip deal with Anthropic, enhancing its cloud services and Tensor Processing Unit (TPU) offerings.
Intel Corp pared gains despite strong revenue forecasts, signaling recovery backed by White House and private investments.
Nvidia and Broadcom surged 2.3% and 2.9%, respectively, boosting the Philadelphia Semiconductor Index by 1.9%.
Ford Motor Co jumped 12% after quarterly profit and sales exceeded estimates despite prior supplier disruptions.
Palantir Technologies rose 2.3%, following a $200 million AI software deal with Lumen Technologies.
Conversely, Fannie Mae slipped 5% following a management shake-up, while Deckers Outdoor Corp fell 15% due to a disappointing sales forecast. Target Corp remained largely unchanged amid corporate restructuring.
Cryptocurrency-Linked Stocks Rally
The crypto sector also saw gains, with Coinbase Global Inc surging 9.8%, marking its strongest performance since late June. This follows JPMorgan Chase’s announcement allowing institutional clients to use Bitcoin and Ether as collateral for loans. Bitcoin itself rose 1% to $110,741.
Additionally, crypto miner TeraWulf Inc completed a debt deal to expand its data center, marking the largest junk bond sale led by a Wall Street institution since the RJR Nabisco acquisition in 1989.
Market Outlook
Friday’s record highs reflect investor optimism amid moderating inflation, strong tech earnings, and accommodative Fed expectations. Analysts caution that while tech and AI stocks are driving current gains, markets remain sensitive to macroeconomic policy, trade developments, and corporate earnings surprises.
“Investors should monitor earnings results closely next week, particularly from mega-cap Tech/AI firms, as these will test the sustainability of current market momentum,” Citi’s Scott Chronert said.
Key Takeaways
S&P 500: +0.8%, led by tech and utilities
Nasdaq 100: +1.0%
Bloomberg Magnificent Seven: +0.6%
Soft CPI data indicates slowest core inflation in three months (0.2%)
Major tech earnings next week: Alphabet, Meta, Microsoft, Apple, Amazon
Cryptocurrency stocks rebound, Coinbase +9.8%, Bitcoin +1%
The convergence of moderate inflation, strong tech earnings, and strategic trade developments positions US equities for potential continued momentum, making next week’s earnings reports a pivotal test for sustaining the rally.
