US Stocks Extend 4-Week Rally: Nasdaq at Highs, But CPI Risk Looms

US equities closed Friday 9 October higher: S&P 500 +0.59% daily, +0.95% weekly; Nasdaq +0.19% weekly (fourth consecutive weekly gain); Dow +0.83% (51,655); Russell 2000 +0.52%. The S&P 500 approached its all-time high set three days prior.

Markets have rallied on steady liquidity and expectations of an eventual Fed pause. Tech benefited most from the reprieve. However, rising Treasury yields, oil above $100, and persistent inflation messaging suggest underlying stress, not euphoria. The weak Michigan sentiment reading released Friday reinforces caution.

The S&P 500 is now very close to all-time highs, but sitting at a technical inflection. The 14 October CPI release poses significant downside risk: if core inflation is hotter than 2.4%, the market will reprice Fed hike odds sharply higher, triggering a sell-off in rate-sensitive growth and tech. Until then, expect chop, but be alert for a retest of 7,811 if data disappoint.