S&P500 Today: CPI Cools, IBM and AMD Lift Tech Stocks in Bullish Rebalancing

Dow Hits Record High as Cooler CPI Ignites Rate-Cut Bets and Bank Rally

Stocks surged to new records Friday after September’s cooler-than-expected CPI report gave traders more confidence that the Fed will resume cutting rates — and soon. The Dow jumped over 500 points and is on track to close above 47,000 for the first time, while the S&P 500 crossed the 6,800 level. Nasdaq outperformed, boosted by tech strength and bullish earnings sentiment.

Is the CPI Light Enough to Keep the Fed on the Rate-Cut Path?

That’s the bet. Friday’s CPI print showed headline inflation rising 0.3% month-over-month and 3% year-over-year — both a notch under the 0.4% and 3.1% economists expected. Core CPI also undershot at 0.2% monthly and 3% annually.

Not a huge miss, but enough to move markets. Traders locked in a near-certainty of a Fed rate cut next week and boosted odds of another in December to almost 99%, according to CME FedWatch. With much of the data calendar blank due to the government shutdown, the Fed has little reason to challenge the market’s rate-cut script.

Which Sectors Are Leading the Charge?

Financials stole the show. JPMorgan, Citi, Wells Fargo, and Bank of America all climbed more than 2% as lower rate expectations sparked hopes for stronger loan growth.

Utilities and communication services followed, both up over 1%.

Tech was another outperformer — the sector rose more than 1.6%, helped by strong sentiment going into earnings and fresh tailwinds from AI and quantum computing developments.

Energy was the laggard, down nearly 0.8% as oil prices softened.

What’s Fueling Tech’s Momentum?

Beyond macro optimism, the space got a boost from AMD and IBM after a reported milestone in quantum computing. IBM said it successfully ran a key error-correction algorithm on AMD chips — a step toward commercializing quantum systems.

AMD shares jumped 6.6%, and IBM rallied more than 7%. With AMD already up over 100% on the year, traders are clearly leaning into any sign of breakthrough tech.

What’s Next for Markets as the Week Closes?

It all comes down to the Fed. The CPI print gave traders what they wanted, but next week’s FOMC meeting is the real test. A dovish message could extend the rally into November, especially if earnings come in solid. But this is a thin market — and a data-starved one. If Powell strikes even a slightly cautious tone, or if key earnings disappoint, bulls could quickly find themselves without support.

Bottom line: The soft CPI was the green light traders were looking for. Now the focus turns to Powell — and whether the Fed is ready to follow through.