Wall Street rises to new records as bank and financial stocks jump

U.S. stocks rose to records Friday as big banks rallied after a run of reassuring profit reports.

The Standard & Poor’s 500 climbed 0.6%, topping its all-time high set earlier in the week and closing out its fifth straight winning week; the Dow Jones industrial average jumped 1%, setting its own record. The Nasdaq composite lagged behind the rest of the market with a gain of 0.3% after a slide for Tesla kept it in check.

Wells Fargo rose 5.6% after reporting stronger profit for the latest quarter than analysts expected. It benefited from better results from its venture capital investments and higher fees for investment banking services, among other things.

Banks and other financial giants traditionally kick off each earnings reporting season, and JPMorgan Chase climbed 4.4% after reporting a milder drop in profit than analysts feared. It was the strongest single force pushing upward on the S&P 500.

Chief Executive Jamie Dimon said the nation’s largest bank is also still buying back shares of its stock to send cash to investors, but the pace is modest “given that market levels are at least slightly inflated.”

BlackRock, meanwhile, rose 3.6% after likewise delivering better profit for the latest quarter than analysts expected. The investment giant ended September managing a record $11.5 trillion in total assets for its customers.

The gains for banks helped make up for the drag of Tesla, which tumbled 8.8% and was the heaviest weight on the market. The electric vehicle maker unveiled its long-awaited robotaxi Thursday night, but critics highlighted a lack of details about its planned rollout.

After the unveiling of the Cybercab, potential rival Uber Technologies jumped 10.8% and was one of the strongest forces lifting the S&P 500. Lyft rose 9.6%.

All told, the S&P 500 rose 34.98 points to 5,815.03. The Dow advanced 409.74 points to 42,863.86, and the Nasdaq composite jumped 60.89 points to 18,342.94.

Another automaker, Stellantis, saw its European-traded shares sink 2.8% after it announced some significant leadership changes, including the timing of CEO Carlos Tavares’ retirement. Its chief financial officer is also departing as the company formed by the merger of PSA Peugeot and Fiat Chrysler struggles to revive sales in North America.

In the bond market, Treasury yields were mixed after the latest updates on inflation at the wholesale level and on sentiment among U.S. consumers.

Prices paid by producers were 1.8% higher in September than a year earlier. That was an improvement from August’s year-over-year inflation level, but not as good as economists expected. Analysts said the data probably helped calm worries stirred a day earlier, when a report showed inflation at the consumer level wasn’t cooling as quickly as economists expected.

A separate report on Friday suggested sentiment among U.S. consumers is lower than economists expected. But the preliminary reading’s decline in sentiment was still within the margin of error, according to Joanne Hsu, director of the University of Michigan’s Surveys of Consumers.

After Friday’s reports, traders built their bets that the Federal Reserve would cut its main interest rate by a quarter of a percentage point at its next meeting, according to data from CME Group.

They’ve pared back their expectations from earlier this month, when some traders were betting on the possibility of another larger-than-usual cut of half a percentage point in November. A run of stronger-than-expected data on the economy recently has wiped out such calls.

Regardless of how much the Fed cuts rates at its next meeting, the longer-term trend for interest rates remains downward, according to Solita Marcelli, chief investment officer, Americas, at UBS Global Wealth Management. That should offer an upward push to stock prices generally.

The Fed last month cut its main interest rate from a two-decade high as it widens its focus to include keeping the economy humming instead of just fighting high inflation.

The yield on the 10-year Treasury rose to 4.09% from 4.07% late Thursday. The two-year yield, which more closely tracks expectations for the Fed’s upcoming moves, edged down to 3.95% from 3.96%.

In markets abroad, stocks fell 2.5% in Shanghai, their latest sharp swing ahead of a briefing scheduled for Saturday by China’s Finance Ministry. Investors hope it will unveil a big stimulus plan for the world’s second-largest economy.

South Korea’s Kospi slipped 0.1% after its central bank cut interest rates for the first time in more than four years in hopes of boosting the nation’s economy.

Choe writes for the Associated Press. AP writers Matt Ott and Zimo Zhong contributed to this report.