Amongst those reporting, Netflix surged over 11% to a record high on Friday as the streaming giant’s subscribers topped expectations, helping lift the communication services sector. Technology stocks also picked up momentum, with data revealing a sharp uptick in iPhone sales in China, boosting Apple, while Nvidia touched a new record high on Thursday after earnings from Taiwan Semiconductor reignited enthusiasm for artificial intelligence related names.
The Dow Jones Industrial Average and S&P 500 added 1.0% and 0.9% respectively. Both indices ended at fresh highs, and this marked their sixth consecutive winning week, their longest streak since December. The tech-heavy Nasdaq Composite gained 0.8%. The majority of sectors managed to see weekly gains, with utilities leading, however the energy sector was the main laggard, hurt by declining oil prices, with Brent crude falling over 8%, given that geopolitical tensions were not as elevated as the previous week. The yield on the 10-year Treasury note had jumped on Thursday to end at 4.095% following better-than-expected retail sales data while weekly jobless claims dropped, pointing to a resilient economy. Despite this uptick, the 10-year yield ended slightly lower for the week.
European markets logged a second weekly rise, with the pan-European STOXX 600 up 0.6%. This came even after some disappointing earnings reports. The luxury sector came under pressure after LVMH posted weak third quarter sales. Meanwhile the tech sector lagged after ASML fell to a 10-month low as it delivered an underwhelming 2025 sales forecast. Investors found support as the European Central Bank delivered another 25 basis point interest rate cut, its first back-to-back cut since 2011. This boosted expectations of another reduction at the December meeting. This followed on from September eurozone inflation being downwardly revised from 1.8% to 1.7%, taking it further below the central bank’s target. The UK inflation rate also fell 1.7% in September, less than expected.
Chinese equities were boosted by supportive measures from the People’s Bank of China. The central bank launched swap and relending schemes to support capital markets, as well as the governor flagging a further cut to the reserve requirement ratio by year end. This came as data revealed that the economy grew by 4.6% in the third quarter, slightly higher than expected but below the second quarter’s 4.7% pace. Nevertheless, other data such as September retail sales and industrial production showed signs of improvement. For the week the Shanghai Composite was up 1.4%, however the Hang Seng declined 2.1%. Another market which experienced a weekly loss was Japan, with the Nikkei 225 falling 1.6%. The core consumer price index eased to 2.4% in September, raising doubts on whether the central bank would raise interest rates again this year.
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