NEW YORK (AP) โ Wall Street rose sharply on Friday, keeping November on track to be one of its best months of the year, as companies continued to post better summer profits than expected.
The S&P 500 jumped 1.6% amid a broad-based rally. The Dow Jones Industrial Average gained 391 points, or 1.2%, and the Nasdaq composite rose 2%.
Stocks rose as financial markets recovered from a slide the previous day, sparked in part by concerns that the Federal Reserve may raise its main interest rate further to rein in inflation. Bets among traders eased on Friday that the Federal Reserve will raise rates at its next meeting, even though a morning report indicated inflation expectations among U.S. households are rising.
This earnings reporting season is also turning out much better than analysts expected and is likely to show the first growth in earnings per share for S&P 500 companies in a year, according to FactSet. But the focus is on what companies will do later this year and beyond, as interest rates remain high and the U.S. economy is expected to slow.
"We think earnings growth can accelerate in 2024," said David Lefkowitz, head of U.S. equities at UBS Global Wealth Management. That's one reason he forecasts the S&P 500 can continue to rise modestly over the next year.
Hologic jumped 7.3% for the biggest gain in the S&P 500 after the maker of diagnostics and other products focused on women's health reported better-than-expected earnings for the latest quarter.
Doximity was another winner, rising 16.2% after it also reported bigger-than-expected gains.
Even some of the day's biggest losers on Wall Street also reported better-than-expected earnings.
Illumina fell 8% after the maker of DNA sequencing products and other technology products lowered its full-year financial forecasts and said "the environment remains challenging." It reported better results for the third quarter than expected.
Wynn Resorts also beat analyst expectations for the latest quarter, but its shares fell 5.7% amid concerns about some weaker trends beneath the surface in Macau.
In total, the S&P 500 rose 67.89 points to 4,415.24. The Dow Jones gained 391.16 to 34,283.10 and the Nasdaq jumped 276.66 to 13,798.11.
Big tech stocks were the strongest forces driving the S&P 500 higher, including a 2.3% gain for Apple and a 2.5% rise for Microsoft.
They tend to be some of the biggest beneficiaries when interest rates and bond yields decline, and Treasury yields remained relatively stable after the previous day's jump.
The 10-year Treasury yield fell to 4.61% from 4.64% late Thursday.
The yield fell even as a morning report suggested U.S. consumers are bracing for higher inflation. Their long-term inflation expectations hit the highest level since 2011, according to a preliminary report from the University of Michigan.
The Federal Reserve has said it wants to keep those expectations low because otherwise they could lead to a vicious cycle that keeps inflation high. The release of the University of Michigan report initially caused Treasury yields to halt their declines, causing stock indexes to falter. But the stock market quickly ignored the data and continued to rise.
Federal Reserve Chairman Jerome Powell warned earlier this month against overstating the importance of the report, when asked how key the University of Michigan reading was to the Fed's thinking.
"We're looking at a variety of things," he said. "I think the UM thing was blown a little bit out of proportion, it was actually a preliminary estimate that was revised, and I said it was preliminary, but it wasn't taken up."
Late Friday, traders were betting on just a 9.1% chance that the Federal Reserve would raise its main interest rate at its next meeting in December, according to CME Group data. That's down from 14.6% the day before.
High interest rates and yields hurt stock prices and other investments, while slowing the overall economy and increasing pressure on the financial system in hopes of controlling inflation.
On Thursday, a jump in yields sent stocks tumbling and snapped an eight-day winning streak for the S&P 500, one of the longest in the past two decades. This came after the Federal Reserve's Powell dashed some of the hopes among traders that the Fed might finally finish raising its key interest rate.
The recent strong moves in financial markets have had "entirely to do with bonds," say Michael Hartnett and other Bank of America strategists.
After the 10-year Treasury yield surged above 5% last month to its highest level since 2007, partly due to expectations of heavy borrowing by the U.S. government, the S&P 500 briefly fell more than 10 % below its highest point of the year. Since then, the market has recovered as โyear-end greedโ set in and 10-year yields retreated, strategists wrote in a BofA Global Research report.
In the oil market, crude oil prices recovered some of the heavy losses from earlier in the week. The benchmark US crude oil barrel for December delivery rose $1.43 to close at $77.17. Brent crude, the international standard, added $1.42 to $81.43 a barrel. Both still lost about 4% for the week on concerns that supply will outstrip demand.
A financial services company at China's largest bank, ICBC, said it was hit this week by a ransomware attack that allegedly disrupted operations in the US Treasury market.
New York-based Industrial and Commercial Bank of China Financial Services manages transactions and other services for financial institutions. It said it had isolated the affected systems and operations had been resolved by Thursday. It was unclear what impact the attack had on trading in the Treasury bond market.
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AP writers Zimo Zhong and Matt Ott contributed.
