The S&P 500 Index ($SPX) (SPY) closed up by +0.59% on Friday, the Dow Jones Industrial Average ($DOWI) (DIA) closed up by +0.83%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.51%. December E-mini S&P futures (ESZ26) rose +0.59%, and December E-mini Nasdaq futures (NQZ26) rose +0.48%.
Stock indexes settled higher on Friday, with the Dow Jones Industrials posting a 1.5-week high. Earnings optimism is underpinning stock prices. According to data compiled by Bloomberg Intelligence, Q3 S&P 500 profits are expected to climb by +25% from a year earlier, up from a July estimate of 22%. Q3 earnings season begins next week when US money center banks report.
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Also, concerns about slowing demand for AI-infrastructure building eased on Friday after people familiar with the matter said OpenAI is expecting to reach or exceed $70 billion in annualized revenue by the end of the year, refuting a report from the Financial Times on Thursday that said OpenAI is on track to generate annualized revenue of roughly $50 billion based on its current performance.
On the negative side for stocks on Friday, the University of Michigan US Oct consumer sentiment index fell more than expected to a 5-month low. Also, the University of Michigan Oct inflation expectations increased, pushing bond yields higher. The 10-year T-note yield rose +2 bp to 5.24%.
The University of Michigan US Oct consumer sentiment index fell -1.8 to a 5-month low of 46.3, weaker than expectations of 47.6.
The University of Michigan US Oct 1-year inflation expectations rose to a 5-month high of 4.7% from 4.6% in Sep, and the 5-10 year inflation expectations rose to a 5-month high of 3.5% from 3.4% in Sep.
Nov WTI crude oil prices (CLX26) finished slightly higher on Friday as signs point to lower US crude output and threats to Gulf Coast refining capacity from Hurricane Isaias. The Marine Minerals Administration reported Friday that Hurricane Isaias has shut in 1.459 million bpd of crude production in the Gulf, or 72% of US Gulf crude production, while 500,000 bpd of refining capacity along the Gulf Coast is threatened as the hurricane moves onshore later on Friday. Also, due to Iranian attacks on shipping in the Strait of Hormuz, shipping costs out of the Middle East are soaring, with freight rates from the Middle East to China jumping to $1.4 million a day, the most on record.
However, crude prices erased their gains in post-market trading Friday afternoon when President Trump said that Russian President Putin agreed to release diesel supplies into the global market. Mr. Trump said Russia will immediately release 300,000 MT of diesel fuel, with additional supplies to follow.
Markets are discounting a 19% chance of a +25 bp Fed rate hike at the next FOMC meeting on October 27-28.
Overseas stock markets settled mixed on Friday. The Euro Stoxx 50 closed up +0.76%. China's Shanghai Composite recovered from a 2.5-month low and closed up +0.05%. Japan's Nikkei-225 Stock Average closed down -0.02%.
Interest Rates
December 10-year T-notes (ZNZ6) closed down by -4 ticks on Friday. The 10-year T-note yield rose +1.7 bp to 5.244%. T-notes were under pressure on Friday from stronger stocks, which curbs safe-haven demand for government debt. Also, the increase in the University of Michigan US Oct inflation expectations to a 5-month high was bearish for T-notes.
European government bond yields moved lower on Friday. The 10-year German bund yield fell -1.4 bp to 3.481%. The 10-year UK gilt yield fell -3.8 bp to 5.443%.
Italy's Aug industrial production fell -1.3% m/m, weaker than expectations of no change and the biggest decline in a year.
Markets are discounting a 12% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Optical-equipment makers rallied on Friday after Lumentum Holdings said its components are “completely sold out” through 2029 on high demand from tech companies clamoring for faster AI data centers. Lumentum Holdings (LITE) closed up more than +5% and Applied Optoelectronics (AAOI) and Coherent (COHR) closed up more than +3%.
Tower companies are gaining today after SpaceX said it had agreed to acquire a nationwide low-band spectrum license portfolio in a deal analysts say is a positive catalyst for the sector. Crown Castle (CCI) closed up more than +15% to lead gainers in the S&P 500. Also, American Tower (AMT) closed up more than +9%, and SBA Communications (SBAC) closed up more than +7%.
Cybersecurity stocks moved higher on Friday, supporting gains in the broader market. Zscaler (ZS) closed up more than +7%, and Okta (OKTA), Palo Alto Networks (PANW), and Cloudflare (NET) closed up more than +5%. Also, Crowdstrike Holdings (CRWD) closed up more than +4%, SentinelOne (S) closed up more than +3%, and Fortinet (FTNT) and Gen Digital (GEN) closed up more than +2%.
Telecom stocks retreated on Friday after SpaceX said it had agreed to acquire a nationwide low-band spectrum license portfolio, which will increase competition from satellite operators. T-Mobile US (TMUS) closed down more than -13% to lead losers in the S&P 500 and Nasdaq 100. Also, AT&T (T) and Verizon Communications (VZ) closed down more than -10%. In addition, Charter Communications (CHTR) closed down -5%, and Comcast (CMCSA) closed down more than -2%.
Fastly (FSLY) closed up more than +16% after Oppenheimer upgraded the stock to outperform from perform, with a price target of $35.
Moderna (MRNA) closed up more than +13% to lead gainers in the Nasdaq 100 after the New York Times reported that there is a planned public-private partnership between Moderna and the National Institutes of Health (NIH) to fast-track the development and testing of cancer vaccines.
Humana (HUM) closed up more than +11% after data from the Centers for Medicare and Medicaid Services showed improved ratings for the company’s Medicare Advantage contract, allowing it to earn bonus payments.
Cboe Global Markets (CBOE) closed up more than +3% after Morgan Stanley double-upgraded the stock to overweight from underweight, with a price target of $358.
Apple (AAPL) closed down more than -1% after cutting component orders for the iPhone 18 Pro and iPhone 18 Pro Max following weaker-than-expected demand. Skyworks Solutions (SWKS), a supplier of Apple, closed down more than -5% on the news.
Earnings Reports (10/12/2026)
Liberty Live Holdings Inc (LLYVA) and SR Bancorp Inc (SRBK) .
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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