Wall Street Rebounds As Oil Prices Ease, Fed Rate Hike Bets Strengthen.
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Wall Street staged a late-week recovery on Friday as a partial retreat in crude oil prices offered temporary relief from surging energy costs, lifting major indices despite lingering inflation anxieties. The S&P 500 advanced 0.86% to close at 7,656.98, the Nasdaq Composite gained 0.96% to 26,333.04, and the Dow Jones Industrial Average rose 0.98% to 52,573.29. Nevertheless, persistent headwinds left all three indices nursing weekly losses—the S&P 500 dropping 0.8% and the Nasdaq falling 0.7%—as geopolitical tensions in the Middle East kept Brent crude elevated near $104 a barrel.The rebound unfolded alongside stronger-than-expected macroeconomic data showing US consumer prices increasing 0.4% in August. The uptick sharply reinforced market expectations that the Federal Reserve will raise interest rates at its upcoming September 15–16 policy meeting, with interest-rate futures pricing in nearly a 90% probability of a hike.
US stocks closed higher on Friday as a retreat in oil prices eased immediate inflation concerns, while stronger-than-expected consumer price data increased expectations that the Federal Reserve will raise interest rates next week.
The S&P 500 advanced 0.86% to close at 7,656.98 points. The Nasdaq Composite gained 0.96% to 26,333.04, while the Dow Jones Industrial Average rose 0.98% to 52,573.29.
Despite the rally, all three major indexes remained on track for weekly losses. The S&P 500 declined 0.8% over the week, while the Nasdaq fell 0.7%, reflecting continued concerns over inflation, elevated Treasury yields and geopolitical risks.
US consumer prices increased 0.4% in August, compared with a 0.1% rise in July. The latest data strengthened market expectations that the Federal Reserve could increase its benchmark interest rate at its September 15–16 policy meeting. Interest-rate futures indicated nearly a 90% probability of a hike, up from around 72% a day earlier.
Oil prices provided some relief to equity investors after retreating from a four-month high. Brent crude, which briefly approached $110 a barrel, fell almost 3% to around $104. However, the benchmark remained approximately 9% higher for the week as attacks on shipping routes in the Middle East continued to raise concerns about supply disruptions.
Technology and hardware stocks led parts of the market higher. Dell Technologies surged 12% to a record level, while Hewlett Packard Enterprise rose 12% and HP gained 8.4% following strong quarterly results from Oracle. Oracle shares, however, declined 1.8%.
Nine of the 11 major S&P 500 sectors finished higher, led by communication services and consumer discretionary stocks. Trading volume remained relatively light, with around 14 billion shares changing hands against an average of 14.9 billion over the previous 20 sessions.
Investors are now focused on the Federal Reserve’s upcoming policy decision and its guidance on future interest rates. Although easing oil prices supported Friday’s recovery, persistent inflation and elevated borrowing costs could continue to limit gains in US equities.
