New York (CNN) — Better-than-expected inflation data Friday morning sparked an end-of-week rally in stocks, sending the Dow, S&P 500 and tech-heavy Nasdaq Composite soaring to fresh record highs.
The Dow gained 473 points, or 1.01%, and closed at 47,207.12. The blue-chip index closed above 47,000 for the first time ever.
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The broader S&P 500 climbed 0.79%. The Nasdaq gained 1.15%. Wall Street’s fear gauge, the VIX, sank 5%.
Wall Street sentiment got a boost Friday after Consumer Price Index data for September showed annual inflation heated up in September but less than expected.
That boosted expectations that the Federal Reserve will cut interest rates at its upcoming policy meetings next week and in December. Fed rate cuts can lower savings and borrowing rates, encouraging spending and investing and boosting business activity, creating a sustained tailwind for the stock market.
Meanwhile, corporate earnings continue to impress Wall Street.
“When the Fed is lowering rates and earnings are good, markets don’t go down very much,” said Bob Doll, chief executive officer at Crossmark Global Investments. “That’s where we find ourselves.”
“Earnings drive stocks, and earnings have been pretty good,” Doll said.
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