Wall Street experienced a bullish surge as major indexes reached record highs, driven by buoyant market sentiment following strong corporate earnings reports and promising discussions regarding trade relations between the United States and China. Investors are now forecasting two additional interest rate cuts this year, with an expectation of three more cuts in 2026.
A key factor in the market’s optimism was a cooler-than-expected inflation report. September inflation data showed a year-over-year rise of 3%, slightly higher than August’s 2.9% but below the anticipated 3.1%. Additionally, core inflation, which excludes volatile food and energy prices, eased from 3.1% to 3%, surpassing market expectations for a tighter outcome. This supportive data is likely to embolden the Federal Reserve, leading many to fully anticipate a quarter-point reduction in the federal funds rate at the upcoming meeting on October 29.
Among the standout performers of the week were major automotive manufacturers from Michigan, with both General Motors and Ford posting double-digit weekly gains following their robust quarterly results. General Motors saw its shares soar to record levels, marking its best week since March 2020. A remarkable 15% spike on Tuesday followed the announcement of third-quarter revenue of $48.6 billion—surpassing analysts’ expectations of $45 billion—and earnings per share of $2.80, well ahead of the $2.29 forecast. GM announced plans to debut hands-free, eyes-off driving technologies by 2028, starting with its electric Cadillac Escalade IQ, despite also revealing cuts to EV production and over 200 job reductions at its tech center in suburban Detroit in response to changing demand.
Ford followed suit, with its shares jumping 10% on Friday—their most significant gain since 2022. The company reported third-quarter revenue of $50.5 billion, marking a 9.4% increase from the previous year, alongside earnings per share of 45 cents, which beat Wall Street expectations of 36 cents. Ford plans to ramp up production of its F-150 and Super Duty trucks by over 50,000 units in 2026 to accommodate growing demand, expanding its operations in Michigan and Kentucky.
In contrast to the positive outlook for the automobile sector, Netflix faced a harsh reality, with its shares plummeting more than 10% for the week. The streaming giant fell short of earnings expectations, attributed in part to a significant $619 million tax charge from its operations in Brazil.
As Wall Street continues to navigate the complexities of economic conditions and corporate performance, analysts and investors are closely monitoring developments that may affect future market dynamics.
