S&P 500, Dow Jones reach record highs as financial stocks rise.

Financial stocks surged on Friday, lifting Wall Street’s optimism and setting new records for the S&P 500 and Dow Jones Industrial Average.

Strong earnings from major U.S. banks outweighed mixed economic data, driving investor confidence.

The S&P 500, tracked by the SPDR S&P 500 ETF Trust SPY, rose 0.7% to over 5,800 points, marking a nearly 23% return so far this year.

The Dow Jones Industrial Average, tracked by the SPDR Dow Jones Industrial ETF DIA, gained 0.8%, hitting 42,780 points and surpassing previous highs.

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

Financial Stocks Fuel Wall Street Gains

The financial sector led Friday’s rise, with the Financial Select Sector SPDR Fund XLF jumping 1.9% to a record high.

Many U.S. banks reported better-than-expected third-quarter earnings. For instance, JPMorgan Chase JPM had an EPS of $4.37, exceeding estimates, causing shares to surge over 4%.

Wells Fargo WFC shares rose 6.2% after reporting strong earnings, despite cautious guidance. Other banks like Bank of America BAC and Morgan Stanley MS also saw notable gains.

Mixed Economic Data Largely Ignored

Economic data revealed a higher-than-expected Producer Price Index (PPI) and a dip in consumer sentiment. The PPI rose to 1.8% year-over-year, while consumer sentiment fell to 68.9 in October, below expectations.

Despite these mixed signals, investors focused on the impressive bank earnings, showing optimism for the upcoming corporate earnings season.

Top S&P 500 Performers on Friday

Top Dow Performers on Friday

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Image created using artificial intelligence via Midjourney.