Key Highlights

  • Boeing closed higher on Friday after the FAA determined a software glitch in 737 MAX flight computers poses no safety concern, with the stock also boosted earlier by Boeing avoiding a strike by its largest white-collar union.
  • The FAA statement said pilots retain full control of the aircraft and the indications to the flight crew are clear and unambiguous, removing an obstacle to certification of the larger 737 MAX 10 variant.
  • Industrials ranked as the third-best S&P 500 sector on Friday, behind consumer discretionary and information technology, with Caterpillar among the stronger Dow names.
  • US crude settled at $91.11, down $1.76, after the G7 agreed to release 100 million barrels of crude and diesel from emergency reserves, a potential boost for Boeing's airline customers' fuel costs.

Boeing (NYSE:BA) shares closed higher on Friday, October 2, after the US Federal Aviation Administration concluded that a software glitch in 737 MAX flight computers is not a safety issue, clearing a hurdle that had hung over the planemaker's newest model. Boeing was among the gainers on the Dow Jones Industrial Average, which rose 250.40 points to 51,176.96. The stock jumped early in the day, was higher after the FAA news, and finished with a smaller gain than its morning peak.

What the FAA Said

A report at 2:50 p.m. Eastern said the FAA had determined the software glitch in 737 MAX flight computers poses no safety concern. In a statement, the agency said pilots retain full control of the aircraft and the indications to the flight crew are clear and unambiguous.

The finding matters because it removes an obstacle to certification of the 737 MAX 10, the largest version of the jet. The FAA had delayed that certification earlier in the week.

The MAX family is Boeing's workhorse narrow-body plane, and getting the MAX 10 approved is important for airline customers who have ordered it. Any regulatory sign-off is closely watched by investors following years of production and safety scrutiny at the company.

A Morning Boost From Labour Peace

Boeing was already trading higher before the FAA headline. Market commentary at the open cited Boeing avoiding a strike by its largest white-collar union, and the stock rose sharply early in the session.

Reports varied on the size of the move through the day, with a gain noted after the FAA news and the closing tally showing a more modest advance than the morning peak. Whatever the path through the session, the stock held on to a gain at the closing bell.

The Market Backdrop

Industrials were the third-best of the 11 S&P 500 sectors on Friday, behind consumer discretionary and information technology. Caterpillar was among the stronger Dow names.

The broader market got a lift from a weak September jobs report. Employers added just 29,000 jobs, far fewer than the roughly 84,000 expected, with prior months revised down by 60,000. Manufacturing was a small bright spot, adding 9,000 jobs.

The soft data cut expectations that the Federal Reserve will raise rates again at its October 27-28 meeting, after it hiked on September 16 for the first time since 2023. Treasury yields fell after the report but closed higher, leaving the 10-year near its highest level since 2002.

Lower oil prices were another theme. US crude settled at $91.11 a barrel, down $1.76, after the G7 agreed, coordinated through the International Energy Agency, to release 100 million barrels of crude and diesel from emergency reserves over four months. Cheaper jet fuel would be welcome news for Boeing's airline customers.

MAX 10 Certification Is the Next Milestone

The next step is whether the FAA moves ahead with certifying the 737 MAX 10, which would be a meaningful milestone for Boeing's order book. Delta Air Lines reports Earnings on October 9, offering a read on airline Demand and fuel costs, which shape how many planes carriers want to buy. The Fed's October 27-28 meeting and the path of oil prices, influenced by the G7 reserve release and the war with Iran, will also set the tone for aerospace and industrial stocks in the weeks ahead.