By Stephen Culp and Tharuniyaa Lakshmi
NEW YORK, Oct 9 (Reuters) - Wall Street gained ground on Friday as investors shifted their focus to next week, with third-quarter earnings season set to start and inflation data expected, which could shed light on the Federal Reserve's next policy decision.
All three major US stock indexes were modestly higher, paring gains after crude reversed an earlier dip and Treasury yields resumed their climb.
All three indexes are poised to notch weekly gains, while the
small-cap Russell 2000 is on course to end lower than last Friday's close.
"It's the kind of back-and-forth market we've been in where we have the reversal of sentiment around Iran," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. "With conflicting headlines coming out of the White House and parties in the Middle East, there's just no edge there."
"That's why it's a fairly tepid rally," Mayfield added.
Crude prices initially retreated after President Donald Trump said the US will not launch any attacks on Iran before the midterm elections, adding that talks between Washington and Tehran aimed at ending the market-rattling Iran war were "productive."
Long-dated US Treasury yields crept higher, but the benchmark 10-year yield remained below Wednesday's 24-year high.
BANKS DUE TO REPORT EARNINGS
Third-quarter reporting season begins in earnest next week, with big US banks Wells Fargo, Goldman Sachs, Citigroup, JPMorgan Chase, Bank of America and Morgan Stanley scheduled to release results.
Analysts estimate S&P 500 annual earnings growth of 30.6%, on aggregate, for the July-September period, with energy and technology leading the pack, posting year-on-year earnings growth of 123% and 66.5%, respectively, according to LSEG data.
The mood of American consumers, who shoulder about 70% of the US economy, has soured this month, according to the University of Michigan, with near-term expectations deteriorating to an all-time low.
The Dow Jones Industrial Average rose 424.32 points, or 0.83%, to 51,655.96, the S&P 500 gained 44.96 points, or 0.58%, to 7,810.23 and the Nasdaq Composite gained 152.26 points, or 0.56%, to 27,345.60.
Among the 11 major sectors of the S&P 500, communication services was the lone percentage loser.
AI-related momentum stocks were generally higher, with the Roundhill Magnificent Seven ETF up 0.8% as the US bull market, largely driven by the AI boom, approaches its four-year anniversary.
Elon Musk's SpaceX struck a deal to acquire a nationwide low-band spectrum portfolio, posing a direct challenge to US wireless companies. Telecom firms T-Mobile US, AT&T, and Verizon dropped between 9.6% and 12.9%.
Humana jumped 12.2% after US government data showed 95% of the health insurer's members were in Medicare Advantage plans rated four stars or higher for 2027.
Apple slid 1.5% after a media report that the iPhone maker has told some suppliers to cut production of components for its newly launched iPhone 18 Pro and iPhone 18 Pro Max, as soaring memory chip costs and price increases dampen consumer demand.
Delta Air Lines dropped 1.2%, as the company cut its annual profit forecast by nearly a quarter at the midpoint of the range.
Advancing issues outnumbered decliners by a 1.65-to-1 ratio on the NYSE. There were 98 new highs and 141 new lows on the NYSE.
On the Nasdaq, 2,690 stocks rose and 1,947 fell as advancing issues outnumbered decliners by a 1.38-to-1 ratio.
The S&P 500 posted 11 new 52-week highs and five new lows while the Nasdaq Composite recorded 35 new highs and 173 new lows.
(Reporting by Stephen Culp; Additional reporting by Tharuniyaa Lakshmi and Shashwat Chauhan in Bengaluru; Editing by Rod Nickel)
