Major indices reached record highs as the CPI came in lower than expected, cementing expectations for two additional rate cuts this year. The market also benefited from another heavy earnings batch from key names beating expectations.

Most Magnificent Seven names are moving higher, except for Tesla (TSLA). Alphabet (GOOG) standouts among the mega-cap names after Anthropic announced an expansion of its use of Google Cloud’s TPU chips.

Technology (XLK) is in the lead this afternoon. The sector is being led higher by International Business Machines (IBM) and Advanced Micro Devices (AMD) following an announcement that IBM successfully executed a quantum error-correction algorithm on AMD’s field-programmable gate array chips. Intel (INTC) also added a positive sentiment across semiconductors after posting a double beat on earnings, yesterday after the close.

The only sector moving lower is Energy (XLE), as natural gas prices are under pressure following EIA inventories that came in higher than expected.

The Utilities (XLU) sector is the runner up being led higher by many nuclear names.

Financials (XLF) are also making a notable move higher, led up by Coinbase (COIN) after the stock was upgraded to Overweight from Neutral by JPMorgan.

Economic Data

The October S&P 500 Composite PMI rose to 54.8 from 53.9. Manufacturing PMI came in at 52.2 from 52 and above estimates of 52. Services PMI also rose more than expected, coming in at 55.2 from 54.2 and above expectations of 53.5.

Meanwhile, the October Michigan Consumer Sentiment report was revised lower to 53.6 from a preliminary reading of 55 and compared to Septembers reading of 55.1.

Notable Changes:

• Current Conditions were revised down to 58.6 from 61
• The Expectations Gauge was also revised down to 50.3 from 51.2
• Year ahead inflation expectations were revised down to 4.6% from 4.7%
• 5-year inflation expectations were revised up to 3.9% from 3.7%

Wishing everyone a great weekend!

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