Stocks rise ahead of third-quarter earnings

2 hours ago

(AWP Alliance News) - Shares ended higher in New York on Friday as investors await third quarter earnings from US banks next week, while oil prices eased on news that the US and Russia have agreed to supply markets with Russian diesel.

The Dow Jones Industrial Average closed up 423.31 points, 0.8%, at 51,654.95. The S&P 500 rose 46.18 points, 0.6%, to 7,811.54. The Nasdaq Composite ended up 172.83 points, 0.6%, at 27,366.17.

"While they still lag behind their AI cousins in terms of recent performance, the world beyond tech is showing some signs of strength after yesterday's OpenAI revenue news. This potential rotation comes just as earnings season dawns, and might mark the point at which embattled European markets manage to make up some lost ground and for the Dow to post a more impressive performance after a week in which the S&P 500 and Nasdaq 100 both made new highs," said IG Chief Market Analyst Chris Beauchamp.

US banks kick off the third quarter earnings season next week, with pharmaceutical company Johnson & Johnson also set to report.

Earnings from ASML and TSMC will also be in focus and could give a boost to the AI trade. In London, oil major BP provides a trading update.

On Wednesday, US inflation figures are likely to paint a mixed picture, with steady core expected against a rise in headline CPI.

AI stocks were mixed on Friday. Media reports on Thursday showed OpenAI was on track to achieve annual revenue below some market forecasts, triggering selling.

Nvidia fell 0.5%, Broadcom gained 0.4% and AMD fell 2.0%. Meta eased 0.3%, Microsoft jumped 2.4% and Cisco climbed 3.1%. Micron declined 0.7%.

US President Donald Trump on Friday said Russia will supply more than 4 million tonnes of diesel to global markets, following a phone call with counterpart Vladimir Putin.

The nation will immediately supply over 300,000 tonnes of diesel, followed by 500,000 tonnes in November, and 1 million tonnes thereafter, Trump wrote on Truth Social.

The president said Moscow will then deliver another 3 million tonnes, subject to the condition of its refineries.

A barrel of Brent fetched USD103.88 late Friday, down slightly from USD104.03 on Thursday. West Texas Intermediate eased to USD91.12 from USD91.33.

The energy market has pulled back after US President Donald Trump on Thursday ruled out attacking Iran before the US midterm elections on November 3.

Meanwhile, Iranian President Masoud Pezeshkian said Friday that peace negotiations will only succeed without "pressure and threats".

Trump's comments signal a potential three-week period of relative calm, which, provided Iran refrains from further escalation, could allow crude exports from the Gulf to remain elevated, analysts at Saxo said.

However, the underlying stress in the oil market remains concentrated in refining capacity and the availability of refined products, particularly middle distillates such as diesel and jet fuel, they added.

"Gulf product exports are estimated at around 50% of pre-war levels, highlighting the continued supply shortfall," Saxo analysts wrote, adding: "A sustained recovery in refinery operations and product exports will therefore be essential before the market can begin to normalise, even as crude flows continue to improve."

The University of Michigan on Friday said its consumer sentiment index stood at 46.3 this month, down from 48.1 in September.

The report noted "sentiment for lower-income consumers and those with smaller stock portfolios dropped steeply."

"Frustration over cost-of-living continues to mount, as consumers across the political spectrum believe that the trajectory of the economy has weakened since the beginning of the year," said survey director Joanne Hsu.

October's consumer sentiment reading was 13.6% below the same period last year.

Meanwhile, year-ahead inflation expectations rose from 4.6% to 4.7% this month.

The yield on the 10-year US Treasury was at 5.25% late Friday, up from 5.23% on Thursday. The 30-year yield was flat at 5.61%.

Against the dollar, the euro was at USD1.1201, down from USD1.1214, on Wednesday. Sterling rose to USD1.3241 from USD1.3231. Against the yen, the dollar was at JPY158.27, down from JPY157.87.

Gold rose to USD4,194.57 an ounce from USD4,133.47.

China and the EU have reached an understanding to "moderate" hybrid vehicles exports, which could prevent millions of Chinese cars from being shipped to Europe, commerce chief Maros Sefcovic said Friday.

Beijing has also committed to continuing the supply of vital items such as rare earth minerals to the EU.

Meanwhile, China has announced a new set of economic development guidelines which include the establishment of AI safeguards and expanding the use of AI across industries, state news agency Xinhua reported on Friday.

The FTSE 100 closed up 1.1% in London, as did the DAX 40 in Frankfurt. The CAC 40 in Paris gained 1.0%.

In China, the Shanghai Composite Index firmed 0.1%. The Hang Seng Index in Hong Kong gained 1.8%. The Nikkei 225 ended slightly lower in Tokyo. The S&P/ASX 200 ended up 0.6%.

Monday's global economic calendar has the US monthly budget statement. Markets in Brazil are closed for Our Lady of Aparecida Day, in Canada for Thanksgiving Day and in Japan for Health and Sports Day. The US bond market is closed for Columbus Day. US equity markets remain open.

By Aidan Lane, Alliance News reporter

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