Wall Street closed out a record-setting week on Friday with another round of gains, even though bond and oil markets gave investors plenty of reasons to stay cautious. According to AP, the S&P 500 rose 0.6% to 7,811.54, the Dow Jones Industrial Average added 0.8% to 51,654.95 and the Nasdaq composite gained 0.6% to 27,366.17.
Technology shares led the recovery after a bumpy few days in which worries about the outlook for artificial intelligence companies had weighed on the sector. Over the full week, the S&P 500 climbed roughly 1.2%, the Dow about 0.9% and the Nasdaq around 0.6%.
The rally came despite a tough backdrop. Brent crude swung between $102.50 and $105 a barrel before settling at $104.72, as traders tried to judge when the war with Iran will let global energy supplies return to normal. President Donald Trump also announced a deal for Russia to supply diesel to world markets, a move meant to ease fuel prices, although many experts remain skeptical about how much it will help.
In the bond market, the yield on the 10-year US Treasury edged up to 5.24% from 5.22% late Thursday. Earlier in the week it touched its highest level since 2002, driven by stubborn inflation, the government’s heavy debt load and signs that the economy is still growing. Higher yields make borrowing more expensive for everyone, and the average 30-year mortgage rate has already reached its highest level in nearly three years.
Consumers are feeling the squeeze. A preliminary University of Michigan survey showed Americans now expect inflation of 4.7% over the coming year, up from 4.6% a month ago and just 3.4% in February, before the war began.
Next week could decide whether the rally lasts. The September consumer price index is due on Wednesday, October 14, and Citigroup, JPMorgan Chase and Wells Fargo report quarterly profits on Tuesday. With stock prices near records, expectations for corporate earnings are high.
