Wall Street Climbs as Amazon Outlook Lifts Investor Confidence
U.S. stocks moved higher on Friday, setting up a strong finish to October as Amazon’s upbeat earnings outlook helped ease investor concerns over excessive AI-related spending.
Shares of Amazon (NASDAQ:AMZN) soared 11% to a new all-time high after the e-commerce and cloud giant projected quarterly sales above Wall Street expectations. The company’s cloud division revenue also expanded at its fastest pace in nearly three years, reinforcing optimism about its growth trajectory.
Big Tech Earnings Drive Market Momentum
Apple (NASDAQ:AAPL) also delivered a positive holiday-quarter forecast for iPhone sales, beating estimates, though CEO Tim Cook cautioned about potential supply chain constraints. Apple stock slipped 0.3% in morning trading.
Nvidia (NASDAQ:NVDA) climbed 1.6% after CEO Jensen Huang said the firm plans to sell its advanced Blackwell AI chips in China, following the company’s historic milestone of surpassing $5 trillion in market value earlier this week.
Earlier in the week, the AI rally sent Wall Street to record highs, but investor enthusiasm cooled amid rising concerns about heavy spending from Microsoft and Meta, and doubts over further Federal Reserve rate cuts.
Indexes Set for Longest Winning Streaks in Years
Despite the volatility, all three major indexes remained on track for solid monthly gains. The S&P 500 was up 2.6% in October, heading for its sixth consecutive monthly advance, marking the longest winning streak since August 2021.
The Nasdaq Composite was poised for its seventh straight monthly gain, while the Dow Jones Industrial Average eyed its sixth in a row, a run last seen in early 2018.
At 10:50 a.m. ET, the Dow Jones Industrial Average rose 111.01 points (0.23%) to 47,633.13, the S&P 500 gained 43.27 points (0.63%) to 6,865.61, and the Nasdaq Composite jumped 282.67 points (1.20%) to 23,863.81.
Fed Signals and Market Sentiment
Markets have been adjusting to a more cautious Federal Reserve outlook after this week’s quarter-point rate cut. Fed Chair Jerome Powell stated that another cut in December was “not a foregone conclusion,” prompting traders to scale back expectations.
The CME FedWatch Tool now shows a 62.8% chance of a December rate cut, down from 91% a week earlier.
“Recently we’ve seen an everything rally because rates are trending lower,” said Dennis Dick, chief strategist at Stock Trader Network. “The market believes the next Fed meeting could strike a more dovish tone.”
Earnings Season Surpasses Expectations
Out of 278 S&P 500 companies that have reported Q3 results, 83.1% have beaten analyst estimates — well above the long-term average of 67%, according to LSEG data.
Notable Movers
- Warner Bros Discovery (NASDAQ:WBD) rose 3.5% following a Reuters report that Netflix (NASDAQ:NFLX) may explore a bid for its studio and streaming units.
- Netflix also gained 3.7% after unveiling plans for a 10-for-1 stock split.
- Getty Images (NYSE:GETY) jumped 14% after signing a multi-year global licensing deal with Perplexity AI.
- Western Digital (NASDAQ:WDC) surged 7.3% after issuing an upbeat earnings forecast.
- First Solar (NASDAQ:FSLR) climbed 12.9% to a one-year high after topping Q3 sales estimates.
Advancing issues outnumbered decliners by a 1.45-to-1 ratio on the NYSE and 1.59-to-1 on the Nasdaq. The S&P 500 recorded 15 new 52-week highs and 33 new lows, while the Nasdaq Composite logged 50 new highs and 113 new lows.
