Dow rises 500 points to record as Friday’s rally on mild inflation data accelerates

U.S. stocks reached new heights on Friday as cool inflation data spurred optimism among investors that the Federal Reserve can stay on its rate-cutting path, boosting the U.S. economy and justifying higher valuations for equities.

The Dow Jones Industrial average

 rose 546 points, or 1.2%. The S&P 500 added about 1%, while the Nasdaq Composite climbed 1.3%. All three major averages reached new all-time intraday highs in the session, with the S&P 500 exceeding 6,800 for the first time in its history. The 30-stock Dow is on pace to secure its first close above the 47,000 level as well.

The September consumer price index report — which was delayed because of the U.S. government shutdown — rose 0.3% on the month, bringing the annual inflation rate to 3%, according to the Bureau of Labor Statistics. That’s just below the 0.4% and 3.1% that economists polled by Dow Jones had expected. When excluding food and energy, core CPI came in at 0.2% last month and 3% on a 12-month basis, also lighter than the Dow Jones forecasts for 0.3% and 3.1%, respectively.