Wall Street's Record Rally Boosted by Cooling Inflation and Strong Earnings

Wall Street stocks surged on Friday, fueled by lower-than-expected inflation data and robust corporate earnings. This rally propelled all three major U.S. indexes toward record closing highs, setting a positive stage for upcoming earnings reports and an anticipated interest rate cut by the Federal Reserve.

The Nasdaq, significantly boosted by tech shares, particularly chip stocks, led the increase, while the S&P 500 and the Dow experienced notable weekly percentage gains. Jay Hatfield, CEO and portfolio manager at InfraCap, noted the rally was driven largely by optimism around corporate earnings and falling rates, with the 10-year U.S. Treasury yield dropping below 4%.

Labor Department data revealed a slightly lower Consumer Price Index than analysts expected, easing inflation fears and almost ensuring a 25-basis-point rate cut. Earnings season is in full swing, with 87% of reporting S&P 500 companies surpassing Wall Street estimates, and major tech giants set to unveil their earnings next week.