US MARKET CLOSE | Three Major Indexes Rise as Sticky CPI Lifts Fed Rate-Hike Bets to 87%; Oil Retreats
US stocks closed higher on Friday as investors digested the Consumer Price Index (CPI) data, which showed inflation remained sticky and reinforced market bets on a Federal Reserve rate hike next week, according to Sina Finance. The Dow Jones Industrial Average rose 509.19 points, or 0.98%, to 52,573.29; the S&P 500 gained 65.28 points, or 0.86%, to 7,656.98; and the Nasdaq added 251.32 points, or 0.96%, to 26,333.04. Most of the "Magnificent Seven" advanced, with Google, Amazon and Apple up more than 1%, Meta, Microsoft and Tesla posting modest gains, and Nvidia slightly lower. Among large-cap technology stocks, Dell Technologies surged more than 11%, Super Micro Computer rose more than 7%, Qualcomm gained nearly 3%, and Intel and SpaceX climbed more than 2%. Optical communications names advanced, with Marvell Technology up more than 4% and Coherent up more than 4%. Storage stocks were mixed, as Seagate Technology fell more than 3%, SanDisk dropped more than 3%, Western Digital declined nearly 3%, and SK Hynix rose nearly 1%. The three major averages had previously fallen for four consecutive trading days; for the Dow, that marked the longest daily losing streak since late April. Oil prices retreated, giving back part of the gains recorded this week on escalating Middle East tensions. At the close, New York Mercantile Exchange light crude for October delivery fell $2.43 to settle at $100.05 per barrel, down 2.37%, while London Brent crude for November delivery fell $3.02 to settle at $104.61 per barrel, down 2.81%. Even so, WTI crude rose nearly 10% for the week and Brent gained nearly 9%. The latest US inflation data showed rising energy prices exerted upward pressure on consumer goods. The August CPI rose 0.4% month-over-month and 3.4% year-over-year, in line with Dow Jones expectations, while core CPI, excluding energy and food, rose 0.3% month-over-month, slightly above expectations. The report prompted traders to increase bets on a Fed rate hike this month. According to the CME FedWatch tool, the market now prices the probability of a 25-basis-point hike at next week's FOMC meeting at about 87%, up from 72% the prior day and 50% a week earlier. After the report, yields were broadly steady, but the 2-year Treasury yield broke above 4.6%, reaching its highest level since July 2024. Seema Shah, chief global strategist at Principal Asset Management, said the debate has shifted quickly from whether the Fed will hike to the more important question of how many hikes this cycle will ultimately require, adding that policymakers may conclude more than one hike is needed to rebuild price stability after five straight years of above-target inflation.
