The S&P 500 closed at a record 7,818.93 on October 6 as investors bet that third-quarter earnings will be exceptionally strong, with big-bank results and September inflation data due this week.
The benchmark index climbed 0.58% to its first record close since August — and its first close ever above 7,800 — as easing Treasury yields and enthusiasm around artificial intelligence pushed buyers back into stocks.
Record close caps an earnings-fueled rally
The record was the peak of a two-day run: the Nasdaq Composite set its own records on consecutive days — 27,477.31 on Monday and 27,599.79 on Tuesday — while the Dow added 0.49% to 51,521.28. Utilities led the advance with a gain of nearly 3% as the 10-year Treasury yield eased about 4 basis points to 5.27%.
Standout movers underlined the earnings optimism. Constellation Energy jumped 12.25% on a major power-supply deal with Google, Option Care Health surged 32.65% on reported buyout talks involving McKesson, and Marvell rose 5.81% after raising its growth outlook at its investor day.
The rally has been narrow, however. The combined market value of the Magnificent Seven hit a record of roughly $25 trillion on Tuesday, according to Dow Jones Market Data — leaving the index's gains concentrated in a handful of mega-cap tech names.
Bank earnings and CPI will test the record this week
The earnings bet faces its first real examination this week. JPMorgan, Goldman Sachs, Wells Fargo and Citigroup report on Tuesday, October 13, with Morgan Stanley and Bank of America following on Wednesday — the same day September's Consumer Price Index is released. A Reuters poll expects CPI to show a 3.7% annual rise, with core inflation at 2.5%.
Analysts expect S&P 500 profits to have jumped more than 30% in the third quarter, according to LSEG IBES data — a high bar, especially for banks. The S&P 500 banks index has fallen 7.5% over the past month as climbing Treasury yields weighed on the sector.
Fed minutes and AI jitters keep markets on edge
The Federal Reserve's September meeting minutes, released on October 7, reminded investors the rate path is far from settled. Most policymakers saw another rate increase by year-end as likely appropriate, after the Fed raised its target range to 3.75%–4.00% on September 16 — its first hike since 2023. Futures markets still price roughly 80% odds of a pause at the October 27–28 meeting.
AI stocks added to the midweek wobble: the Nasdaq-100 fell 1.4% on Thursday after a Financial Times report put OpenAI's annualized revenue near $50 billion, below figures some investors had assumed. A Bloomberg report on Friday saying OpenAI expects annualized revenue to reach or exceed $70 billion by year-end revived the AI trade, and the S&P 500 rebounded 0.59% to 7,811.54 — the second-highest close in its history.
Friday's other big story was telecom: Crown Castle surged 11.39% to $76.74 after SpaceX agreed to buy Grain Management's nationwide 800 MHz low-band spectrum for about $8 billion in cash, lifting tower stocks while established carriers slid on fears of a new deep-pocketed rival.
The S&P 500 ended the week up 1.15% at 7,811.54, roughly 14.1% higher for the year. With earnings season now arriving in force, investors will soon learn whether the record was justified — or premature.
Music in this post's reel: Kevin MacLeod - Long Road Ahead B (incompetech.com), licensed under CC BY 3.0
Sources: