Stocks rallied Friday as investors positioned for a wave of company profit reports next week, lifting all three major indexes and sending each to a weekly gain.

The Dow Jones Industrial Average rose 423.31 points, or 0.83%, to 51,654.95. The S&P 500 gained 0.59% to 7,811.54, and the Nasdaq Composite added 0.64% to 27,366.17. Smaller companies joined in, with the Russell 2000 up 0.46% to 2,806.

The gains capped a bumpy week. On Thursday, technology shares slid after reports that OpenAI’s annual revenue was roughly $20 billion lower than previously estimated. Friday brought relief as oil prices eased and tech stocks bounced back.

For the week, the S&P 500 rose 1.15%, the Dow gained 0.93% and the Nasdaq climbed 0.64%. The S&P 500 now sits just below the record of 7,844.52 it set earlier in the week, a gap of less than half a percent.

The rally came despite two pressures that hit everyday budgets. Long-term borrowing costs jumped this week, with the 10-year Treasury yield reaching 5.3645%, its highest level since April 2002. Lenders use that rate as a guide for mortgages, so when it rises, home loans tend to follow. Oil is the other strain, with Brent crude settling at about $104 a barrel on Friday. That price runs through to gas stations, shipping costs and airline tickets.

Delta Air Lines gave investors a preview of what high fuel prices are doing to company profits. Delta reported adjusted earnings of $1.72 per share for the July-through-September quarter, nearly flat from $1.70 a year earlier. Its adjusted fuel bill jumped 62% to $4.14 billion, and the average price it paid per gallon of jet fuel rose from $2.25 to $3.61. In plain terms, Delta now pays about $1.60 for every $1 of fuel it bought a year ago.

Delta said revenue grew 16% in the quarter and pre-tax profit held at $1.5 billion, in line with last year, while absorbing $1.6 billion in higher fuel costs. Looking ahead, the airline expects about $1.2 billion in pre-tax profit for the final three months of the year, even as it projects fuel prices doubling from a year ago.

For travelers, that points to pricier tickets. Delta CEO Ed Bastian said demand remains strong and fares appear to be climbing further while fuel stays high.

Next week, the spotlight turns to the nation’s biggest banks. JPMorgan Chase, Citigroup, Goldman Sachs and Wells Fargo report Tuesday. Bank of America, BlackRock and Morgan Stanley follow Wednesday, with PNC, Charles Schwab and U.S. Bancorp on Thursday, and Citizens, M&T, Regions, Truist and Travelers on Friday.

Bank results matter to households because banks see how Americans are handling their money in real time. Their reports will show whether people are still borrowing, how much they are putting on credit cards and whether more borrowers are falling behind on payments. One market analyst said the bank numbers will offer an early read on how businesses and consumers are absorbing higher borrowing costs.

Inflation data arrives in the same week. The government’s consumer price report comes out Wednesday, followed by a wholesale price report. Those numbers will help decide whether the Federal Reserve holds interest rates steady after raising them in September. The Fed’s next meeting is set for Oct. 27-28.

The combination investors want is simple. If companies post strong profits while price increases cool, stocks have room to push to a new record. If inflation comes in hotter than expected, rates could stay high, keeping pressure on mortgages, car loans and credit card bills.

Not every corner of the market shared in Friday’s gains. Telecom stocks fell after SpaceX agreed to buy nationwide wireless airwaves to build out its Starlink Mobile phone service, raising worries about new competition for AT&T, Verizon and T-Mobile. Chipmakers also gave back an early advance.

Real estate and health care led the way, with those sectors up 1.85% and 1.48%, respectively.

JBizNews Desk | Wall Street

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