By Caroline Valetkevitch
NEW YORK (Reuters) -Major stock indexes rose, with U.S. stocks hitting record highs, on Friday on news that U.S. inflation rose less than expected last month, while the U.S. dollar index was nearly flat.
The U.S. Consumer Price Index rose 0.3% last month, slightly less than the expected 0.4%, after climbing 0.4% in August. That reinforced expectations that the Federal Reserve will cut interest rates at its policy meeting next week.
“Today’s inflation data shows that we’re not in a crisis like 2022. Prices are growing, but at a controlled pace. That’s good news if you’re hoping the Fed will continue to cut interest rates,” said Callie Cox, chief market strategist at Ritholtz Wealth Management in Charlotte, North Carolina.
The Fed is expected to reduce rates two more times this year, with a quarter-percentage-point cut baked in for the October 28-29 meeting, according to LSEG calculations using rate futures.
The Canadian dollar barely reacted to U.S. President Donald Trump saying on social media that he was ending all trade negotiations with Canada. The Canadian dollar was last down 0.28% versus the greenback at C$1.4 per dollar.
Shares of Intel rose 0.3% after its results late Thursday beat expectations.
The Dow Jones Industrial Average rose 562.73 points, or 1.21%, to 47,297.34. The S&P 500 climbed 66.16 points, or 0.98%, to 6,804.60 and the Nasdaq Composite advanced 297.83 points, or 1.30%, to 23,239.63.
Five of the so-called Magnificent Seven U.S. companies at the center of the artificial intelligence boom, including Apple and Microsoft, are due to report earnings next week. U.S. stock markets have surged this year, and some analysts see signs of a bubble.
MSCI’s gauge of stocks across the globe rose 7.63 points, or 0.77%, to 1,002.72.
The pan-European STOXX 600 index rose 0.23%.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was little changed at 98.94, with the euro up 0.08% at $1.1626. Against the Japanese yen, the dollar strengthened 0.16% to 152.85.
Euro zone business activity unexpectedly grew faster in October, data showed. Euro zone government bond yields rose.
U.S. Treasury yields were higher, with the 10-year yield briefly easing after the CPI data.
Longer-dated U.S. yields moved up after a consumer sentiment survey from the University of Michigan showed a decline in the index, but an increase in five-year inflation expectations.
The benchmark U.S. 10-year note yield rose 1.4 basis points to 4.003%, from 3.989% late on Thursday.
Oil prices, which had risen 5% on Thursday after the U.S. sanctioned major Russian oil companies, eased. U.S. crude fell 29 cents to settle at $61.50 a barrel and Brent eased 5 cents to settle at $65.94.
Spot gold fell 0.32% to $4,111.97 an ounce.
(Reporting by Caroline Valetkevitch in New York and Elizabeth Howcroft in Paris; additional reporting by Laura Matthews in New York; editing by Toby Chopra, Joe Bavier, Alison Williams, Edmund Klamann and Richard Chang)
