(Corrects paragraph 14 to say that Claude is Anthropic's chatbot, not Google's) * Indexes up: Dow 1.14%, S&P 500 0.98%, Nasdaq 1.31% * Intel gains on beating quarterly profit estimate * Deckers Outdoor down after FY sales target comes below estimate * September US consumer prices rise slightly less than expected By Stephen Culp NEW YORK, Oct 24 (Reuters) – Wall Street stocks rallied on Friday as cooler-than-expected inflation data and upbeat corporate earnings put all three major U.S. indexes on course for record closing highs, setting the stage for next week's earnings reports and an expected interest rate cut by the Federal Reserve. The S&P 500 and the Nasdaq are on track for their largest weekly percentage gains since August, while the blue-chip Dow was on its way to its biggest Friday-to-Friday jump since June. Tech shares, in particular chip stocks, provided the Nasdaq the most lift. "The market normally rallies during earnings as long as the economy is relatively stable," said Jay Hatfield, CEO and portfolio manager at InfraCap in New York. "So it's partly earnings and it's also lower rates; the 10-year (U.S. Treasury yield) dropped below 4%." The Labor Department reported that the Consumer Price Index was still elevated but a bit lower than analysts had expected last month, calming fears of an outsized impact of tariffs on inflation and all but locking in a 25-basis-point rate cut at the end of the Fed's monetary policy meeting next week. The CPI report provided a rare set of official government data as releases have generally ground to a halt during the current government shutdown driven by a congressional budgetary impasse. "This rally is 99% about the CPI print," Hatfield said. "The shelter component, which is about 40% of CPI, has finally dropped, and that clears the path for another 125 basis points of rate cuts over the next year." Third-quarter earnings season has shifted into overdrive, with 143 of the companies in the S&P 500 having reported. Of those, 87% have beaten Wall Street expectations, according to LSEG data. Analysts now expect third-quarter S&P 500 earnings growth of 10.4% year-on-year in aggregate. That marks a robust improvement over the 8.8% annual growth expectations as of October 1, per LSEG. Next week's earnings roster is packed with high-profile results from Meta Platforms, Microsoft, Alphabet , Amazon.com and Apple – five of the "Magnificent Seven" group of megacap momentum stocks. Additional market movers include industrial firms Caterpillar and Boeing. The Dow Jones Industrial Average rose 531.56 points, or 1.14%, to 47,266.17, the S&P 500 gained 65.85 points, or 0.98%, at 6,804.29 and the Nasdaq Composite climbed 299.55 points, or 1.31%, to 23,241.34. Among the 11 major sectors of the S&P 500, tech shares were up the most, while energy suffered the biggest percentage drop. Alphabet gained ground after Anthropic expanded its deal with Google to use as many as one million of the tech giant's artificial intelligence chips to train its Claude chatbot. Its shares advanced 3.1%. Procter & Gamble rose 1.1% after the consumer products maker's earnings topped Wall Street estimates due to strong demand for its beauty and hair-care products. Coinbase Global got a 8.6% boost after JPMorgan upgraded the stock to "overweight" from "neutral." Deckers Outdoor forecast full-year sales below Wall Street estimates, sending shares of the Hoka sneakers maker down 12.7%. Ford jumped 12.8% after beating third-quarter profit expectations. General Dynamics also surpassed estimates, sending its shares up 1.5%. Alaska Air slid 6.4% after the airline cut its annual forecast. Advancing issues outnumbered decliners by a 2.59-to-1 ratio on the NYSE. There were 447 new highs and 44 new lows on the NYSE. On the Nasdaq, 3,286 stocks rose and 1,275 fell as advancing issues outnumbered decliners by a 2.58-to-1 ratio. The S&P 500 posted 34 new 52-week highs and four new lows while the Nasdaq Composite recorded 118 new highs and 35 new lows. (Reporting by Pranav Kashyap and Twesha Dikshit in Bengaluru; Editing by Ronojoy Mazumdar, Shinjini Ganguli, Shilpi Majumdar and Richard Chang)
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