Wall Street Watch: Major Banks Lift Markets Amid Rate Cut Speculations

Futures in the U.S. treaded water amid earnings results from major banks, while Tesla dropped after unveiling its robotaxi. Markets anticipate a 25-basis-point rate cut in November following unexpected inflation figures. Despite the mixed signals, all major indices are set for a fifth consecutive week of gains.

Futures linked to the S&P 500 and Dow remained steady on Friday as major banks reported third-quarter earnings. Investors showed caution following inflation data that exceeded expectations, raising the likelihood of a 25-bps rate cut in November. Tesla's shares dropped 6.5% after revealing its highly anticipated robotaxi.

JPMorgan Chase gained 1.9% with third-quarter results, and Wells Fargo rose 3.9% despite an initial drop due to decreased profit from reduced loan demand. Meanwhile, Dow E-minis saw a slight increase, while S&P 500 and Nasdaq E-minis experienced minor declines. Despite challenges, all major indices are set for their longest winning streaks in several months.

In the face of ongoing economic uncertainties, such as geopolitical risks and U.S. presidential elections, banks' earnings will gauge the sustainability of 2024's market rally. Analysts maintain a strong expectation of a rate cut, bolstered by recent inflation data and a rise in jobless claims indicating potential labor market weaknesses.

(With inputs from agencies.)