U.S. stocks rallied on Friday following a moderate inflation report, reinforcing expectations that the Federal Reserve will cut interest rates next week. The tech-heavy Nasdaq led the gains, rising 0.3% and closing the week up 0.9%. The Dow Jones and S&P 500 increased by 0.2%, with weekly gains of 0.5% and 0.3%, respectively. The major indices are approaching all-time highs, with the Nasdaq about 2% shy of setting a new record.
The inflation data showed the Personal Consumption Expenditures index rose 2.9% year-over-year through September, aligning with forecasts. Core inflation, excluding food and energy, increased 2.8%, slightly below economists’ estimates. These figures, along with recent labor market reports, are expected to influence the Fed’s policy decision next Tuesday and Wednesday, with a predicted quarter-point rate cut.
In corporate headlines, Netflix announced a groundbreaking $83 billion deal to acquire Warner Bros. Discovery's film and streaming assets, including iconic franchises like Harry Potter and Game of Thrones, as well as HBO Max.
Netflix outbid rivals Paramount Skydance and Comcast in a competitive bidding war. The deal still awaits regulatory approval and has drawn criticism from industry groups over its potential impact on workers and consumers. Netflix plans to cut costs by $2-3 billion through operational efficiencies, while continuing to produce films for theatrical release and maintaining Warner Bros.' television production.
Major tech stocks had mixed results, with Broadcom climbing over 2%, while Meta Platforms and Alphabet gained over 1%. Microsoft, Amazon, and Tesla edged higher, though Nvidia and Apple dipped slightly. The 10-year Treasury yield increased to 4.14%, influencing borrowing costs.
Commodities saw gold futures decline 0.4% to $4,225 an ounce, while oil prices rose 0.9% to $60.20 per barrel. Bitcoin dropped to $89,400 after exceeding $92,000 earlier, and the U.S. dollar index remained steady at 99.
