S&P 500, Dow Jones hit records as financial stocks rise.

On Friday, a surge in financial stocks raised optimism on Wall Street, leading the S&P 500 and Dow Jones Industrial Average to new record highs.

Strong earnings from major U.S. banks helped lift the market, despite mixed economic data released earlier.

The S&P 500, tracked by the SPDR S&P 500 ETF Trust (SPY), surpassed 5,800 points, gaining 0.7% for a nearly 23% increase this year. The Dow, followed by the SPDR Dow Jones Industrial ETF (DIA), rose 0.8% to hit 42,780 points, breaking its previous record from September.

Chart: S&P 500 and Dow Reach All-Time Highs

Financial Stocks Lead Wall Street Rally

The financial sector drove the gains on Friday. The Financial Select Sector SPDR Fund (XLF) surged 1.9%, its best session since November 2023, reaching a new high.

Major U.S. banks reported strong third-quarter earnings, enhancing confidence in the sector. JPMorgan Chase (JPM) reported EPS of $4.37, exceeding expectations, with shares climbing over 4% mid-morning. Wells Fargo (WFC) saw its shares jump 6.2% after beating EPS forecasts.

Other banks, including Bank of America (BAC) and Morgan Stanley (MS), also experienced significant gains.

Mixed Economic Data

Economic indicators released included a higher-than-expected Producer Price Index (PPI) and a lower-than-expected Michigan Consumer Sentiment for October. PPI rose 1.8% year-over-year, while consumer sentiment dropped to 68.9, both missing forecasts.

Despite the economic uncertainty, investors remained positive thanks to strong bank earnings and upcoming earnings announcements.

S&P 500’s Top Performers on Friday

Dow’s Top Performers on Friday

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