Stock market today: Dow closes above 47,000 for first time amid tame inflation

Investing.com-- The Dow closed above 47,000 for the first time ever on Friday as benign inflation data provided the "all clear" for Federal Reserve to cut interest rates next week.  

At 4:00 ET (20:00 GMT), the Dow Jones Industrial Average rose 472 points, or 1%, to close at at a record 47,207.12. The S&P 500 index gained 0.8%, and the NASDAQ Composite climbed 1.2%. All three major average hit record intraday highs. All three of the major averages notched record closing highs. 

Cooling Inflation gives ’all clear’ for October rate cut

Data released earlier Friday showed that the U.S. Consumer Price Index rose 3.0% annually in September, below the 3.1% expected, while the monthly gauge rose 0.3%, below the 0.4% expected.

The so-called "core" consumer price index, which the Fed assesses as an underlying measure of inflation in the world’s biggest economy, was 3.0% year-over-year and 0.2% on a monthly basis. Analysts had anticipated readings of 3.1% and 0.3%, which would have both matched the number in August.

"The inflation data provided the all clear for October fed rate cut and end of quantitative tightening," Jefferies’ Thomas Simons said in a Friday note.

The release had been delayed by the over-three-week-old U.S. government shutdown, and has taken on added importance given the data vacuum caused by the government shutdown, which has disrupted most official economic reporting.

Intel, Ford shine on earnings stage

Intel (NASDAQ:INTC) stock surged after the semiconductor beat expectations for its third quarter profit helped by dramatic cost cutting measures.

The results were the company’s first earnings announcement after multibillion-dollar investments from Nvidia (NASDAQ:NVDA) and Japan’s SoftBank as well as an unprecedented U.S. government stake, with investors anticipating a major cash boost.

Ford (NYSE:F) stock gained after the carmaker posted quarterly income which topped expectations thanks to strong demand for its SUVs and pickup trucks.

Target (NYSE:TGT) announced it will cut about 1,800 corporate-level roles, representing around 8% of its global headquarters workforce, in a major restructuring initiative.

Looking ahead to next week, five of the Magnificent Seven arereporting results, including Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT).

U.S.-China trade meeting confirmed

Sentiment had earlier received a boost after the White House confirmed that U.S. President Donald Trump will meet his Chinese equivalent Xi Jinping in South Korea during next week’s APEC summit, a development that buoyed markets after recent heightened U.S.–China trade friction.

The planned meeting follows Washington’s threat to impose 100% tariffs on certain Chinese goods and Beijing’s introduction of export curbs on rare earth materials. 

The prospect of renewed dialogue lifted investor hopes for de-escalation in trade disputes between the two largest economies in the world that have clouded the global outlook.

That said, Trump also said that all trade negotiations with Canada have been terminated, accusing Ottawa of using a “fraudulent” advertisement involving late President Ronald Reagan.

Peter Nurse, Ayushman Ojha contributed to this article