Wall Street Marks New Record Highs On Strong Start To Earnings Season, Investors Downplay Inflation Surge, Tesla Disappoints: This Week In The Market

The S&P 500 and Dow Jones Industrial Average both achieved record highs this week.

A strong kickoff to the third-quarter earnings season fueled both indexes, offsetting concerns from last month's unexpected inflation surge.

JPMorgan Chase & Co. JPM, Wells Fargo & Co. WFC, Bank of New York Mellon Corp. BK and BlackRock Inc. BLK all exceeded analyst earnings forecasts Friday. This triggered a stock rally and propelled the financial sector to new highs.

In contrast, Tesla Inc. TSLA faced investor disappointment. The Austin, Texas-based car company is one of the worst performers within the S&P 500 this week.

The much-anticipated "We, Robot" event on Thursday was partly to blame. The presentation failed to impress analysts and investors, alike. Critics said it was more fanfare than substance.

While the company showcased its CyberCab and Optimus robot, key details about commercialization and timelines were lacking. The event sparked mixed reactions from investors, with concerns about whether Tesla can deliver on its ambitious autonomous vehicle promises.

As a result, the Elon Musk-led EV manufacturer saw its share price plunge Friday.

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Economic data disappoints

September inflation reports for both consumers and producers come in higher than expected, while jobless claims posted the sharpest rise in over a year.

Despite the inflation uptick, interest rate expectations remained largely unchanged, with most traders and economists maintaining their outlook for a November rate cut. The unemployment spike was attributed to temporary factors, including Michigan auto layoffs and Hurricane Helene.

No Stimulus Measures In China

Chinese stocks saw their worst weekly performance of the year. The absence of expected stimulus measures from Chinese authorities weighed heavily on investor sentiment, despite a strong rally in recent weeks.

Mortgage Rates Surge

Mortgage rates saw a sharp reversal last week, jumping to 6.36% and leading to a 5.1% drop in homebuyer applications. The housing market awaits further rate cuts, but rising Treasury yields —driven by a resilient labor market — pose significant challenges to mortgage rate relief in the near term.

Google fights back

Alphabet Inc.‘s GOOGL Google is challenging the Department of Justice’s efforts to break up its search dominance, labeling the proposed antitrust remedies as radical.

The tech giant argues the DOJ's recommendations could dismantle its core business, impacting innovation and consumer choice.

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