US equities opened higher on Friday, with the Dow Jones Industrial Average climbing 143 points, as investors weighed a softer-than-expected producer inflation report against ongoing turbulence in the artificial intelligence sector and a slide in cryptocurrency prices.
The October Producer Price Index (PPI) rose 0.3% month over month, coming in below the 0.4% increase economists had forecast. The annual rate, however, remained elevated at 6.5%, the largest year-over-year gain since November 2022. The data offered some relief to those concerned about persistent inflation and the Federal Reserve's next policy move.
Market expectations still point to a rate hike in December, with a 25-basis-point increase fully priced in. According to CME's FedWatch tool, the probability of a larger 50-basis-point move stands at 10.7%. The softer producer price reading may temper some worries about the pace of monetary tightening, though the annual figure underscores that inflationary pressures are far from resolved.
The S&P 500 gained 0.13%, while the Nasdaq Composite slipped 0.13%, reflecting a mixed session. The modest gains follow a volatile Thursday when major indexes retreated amid concerns over Nvidia's leadership transition and the broader AI trade.
Nvidia Rebounds From Weekly Losses
Nvidia shares fell 0.88% on Friday, paring some of the steep losses from earlier in the week. The chipmaker had dropped approximately 11% through Thursday after founder and CEO Jensen Huang resigned. Chief Financial Officer Colette Kress has been named interim CEO while the board searches for a permanent replacement.
The leadership change has raised questions about Nvidia's strategic direction and its role in the AI industry. Nvidia's financing arrangements with other AI companies could also face increased scrutiny. Despite these concerns, the partial recovery in Nvidia's stock helped support sentiment across the technology sector.
Elsewhere, Cerebras surged more than 16% after raising its 2026 revenue forecast and announcing Microsoft as a customer. Microsoft shares, however, dipped 1.32% following an outage affecting Outlook and Teams that lasted over 12 hours.
Earnings Strength and Geopolitical Risks
Corporate earnings have provided a cushion against the recent volatility. Of the 450 S&P 500 companies that had reported results by Thursday, 83.6% exceeded analyst expectations, according to LSEG Data and Analytics.
Investors are also monitoring geopolitical developments. Oil prices rose for a third consecutive session after US President Donald Trump said Washington did not need an agreement with Iran, raising concerns about prolonged conflict and potential energy supply disruptions.
Crypto-related stocks declined, with Coinbase and Strategy falling between 1% and 3%. Bitcoin dropped below $70,000 for the first time since August, adding to the risk-off tone in digital assets.
Despite the week's turbulence, the major indexes are on track for solid weekly gains. The Nasdaq is poised for a 3.2% advance, the S&P 500 is set to gain 2.9%, and the Dow is heading for an increase of nearly 2%. All three are on pace for their strongest weekly performance since early August.
This article is for informational purposes only and does not constitute financial advice.
