U.S. equity benchmarks finished the session and the week slightly higher on Friday, and the Nasdaq recorded an all-time high, as President Donald Trump delivered a speech decertifying a nuclear agreement with Iran.
What did the main benchmarks do?
The Dow Jones Industrial Average
rose 30.71 points, or 0.1%, to end at 22,871.72, after notching an intraday all-time high at 22,905.33, aided by gains in American Express Co.
and McDonald’s Corp.
The S&P 500 index
advanced 2.24 points, or 0.1%, to close at 2,553.17, after hitting an intraday record at 2,557.65. The broad-market index saw its sharpest sector gains in technology and materials, both up 0.5%.
Meanwhile, the Nasdaq Composite Index
climbed 14.29 points, or 0.2%, to 6,605.80. The technology-laden index booked its 57th record close in 2017.
For the week, gains were modest. The Dow industrials recorded a weekly rise of 0.4%, while the S&P 500 saw an 0.2% increase. Both have risen for five straight weeks. The Nasdaq logged a 0.2% weekly advance, marking its third consecutively weekly win.
In the year to date, the Dow has gained nearly 15.7%, the S&P 500 is 14%, and the Nasdaq Composite has advanced about 23%.
What drove markets?
Upbeat earnings reports from banks and the highest consumer-sentiment reading in 13 years supported modest buying.
Against that backdrop, the Trump administration said it won’t certify Iran’s compliance with a 2015 nuclear agreement, declaring Tehran a regime that continues to sponsor terrorism and alleging that Iran “intimidated international expectations” sent to inspect it from building up nuclear armaments.
Trump laid out a new strategy to deal with Iran and warned that he could cancel U.S. participation in the nuclear pact at any time. The strategy includes placing additional sanctions on the Iran regime to block its “financing of terror,” said Trump.
The president also ended billions of dollars in subsidies to insurers under the Affordable Care Act program. The White House said the government can’t lawfully make the payments as there is no appropriation for them.
What did the data show?
The consumer-price index rose 0.5% in September, the second increase in a row and the largest in eight months. However, economists polled by MarketWatch had forecast a 0.6%. Stripping out volatile food and energy costs, core CPI rose at a much smaller 0.1% rate.
A reading on retail sales showed a rise of 1.6% in September, reflecting the largest increase in 2½ years, coming in line with Wall Street expectations.
The University of Michigan’s preliminary reading of the consumer-sentiment index for October came in at 101.1, marking its highest level since 2004.
Check out: MarketWatch’s Economic Calendar
What did strategists say?
“There’s no reason to sell. Just sit and watch your stuff go up and that’s why trading volumes are low,” said Randy Frederick, managing director at Schwab Center for Financial Research, referring to measures of volatility, notably the CBOE Volatility Index
hanging around historic lows, below 10, as stocks test records.
Jack Ablin, chief investment officer at BMO Private Bank, said the weaker than expected inflation report reinforced the view that the Fed will take a more tempered approach to tightening monetary policy, even if the central bank appears committed to hiking rates in December.
“The weaker than expected inflation results set the stage for some risk taking,” he said. “As long as we have reasonable economic growth with low inflation than the path of least resistance is higher,” he continued.
Which Fed speakers were in focus?
Outgoing Fed Vice chairman Stanley Fischer said Fed Chairwoman Janet Yellen should serve a second four-year term. “Janet is a safe pair of hands and very good at explaining what she is doing and persuading people of what she’s doing and I think that is critically important,” he said.
Fed Chairwoman Janet Yellen will speak on Sunday.
Which stocks were in focus?
Wells Fargo & Co.
shares declined 2.8%, after it reported third-quarter earnings that were weaker than expected, with a profit of $4.6 billion, or 84 cents a share, including a charge of $1 billion to settle a mortgage-linked probe, compared with profit of $5.6 billion at the same period last year.
Antares Pharma Inc.
shares sank 38%, after the company’s announcement Thursday that the U.S. Food and Drug Administration had found deficiencies in the drug Xyosted (testosterone enanthate) during its review process.
What are other assets doing?