US stocks surged on Friday, fueled by easing oil prices and a rebound in technology shares. The Dow Jones Industrial Average increased by 0.8%, the S&P 500 rose by 0.6%, and the Nasdaq Composite also gained 0.6%. Each of the major indices recorded weekly gains, capping a week marked by volatility.
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Delta Air Lines reported third-quarter earnings that fell short of expectations, maintaining its stock price. High fuel prices overshadowed the airline's growth in its premium business. This earnings report sets the stage for the upcoming unofficial start of earnings season, with major Wall Street banks set to reveal results next Tuesday.
Tech stocks rebounded after concerns regarding a report from the Financial Times about OpenAI’s revenue potential. Initial fears arose from the estimate that OpenAI's annualized revenue would peak at $50 billion, which was $20 billion below market expectations. However, Bloomberg's subsequent report indicated that OpenAI anticipates exceeding $70 billion in revenue by year-end, alleviating concerns about the sustainability of the AI market.
Oil prices declined markedly as Brent crude futures hovered around $104 per barrel. This drop followed President Trump's announcement that Russia's President Vladimir Putin agreed to release diesel supplies to both the US and global markets. High fuel costs have continued to pressure US consumers, as indicated by a University of Michigan survey that showed consumer confidence has hit a five-month low.
Looking ahead, investors are focused on next week's earnings season kickoff, with expectations of strong earnings reports for the third quarter, driven partly by ongoing interest in AI-related stocks. The volatility seen this week has included rising bond yields, which remained high but also eased on Friday.
Delta Air Lines faced rising operational costs, with its total fuel bill for the year projected to increase by $6 billion. The airline reported adjusted revenues of $17.58 billion for Q3, slightly below analyst estimates of $17.76 billion. Adjusted earnings per share (EPS) were $1.72, down from an expected $1.82.
In broader market trends, historical patterns suggest that midterm elections may set the stage for a year-end rally, as the S&P 500 has historically seen gains during similar periods. Analysts remain optimistic about the market's trajectory despite recent pressures from inflation and rising energy costs.