7 hrs ago
Wall Street Rallies as Inflation Data Boosts Rate-Hike Bets
U.S. stock markets rose on Friday.
A government inflation report showed prices increased more quickly in August.
This made investors think the Federal Reserve will raise interest rates next week.
Higher interest rates can help slow rising prices.
Investors also reacted positively to strong results from some technology companies.
Dell shares reached a record high.
Oil prices fell during the day, but they were still much higher for the week.
Concerns about inflation, Treasury yields and costly artificial-intelligence data centers had recently made investors nervous.
The major stock indexes all finished higher.
U.S. consumer prices rose 0.4% in August after increasing 0.1% in July.
Interest-rate futures showed nearly a 90% chance of a Federal Reserve rate increase Wednesday.
The S&P 500 rose 0.99%, while the Nasdaq and Dow each gained 1.08%.
Dell, Hewlett Packard Enterprise and HP climbed after Oracle reported stronger-than-expected quarterly results.
Oil prices fell, although Brent crude remained above $104 a barrel and up more than 9% for the week.
- Who
- Wall Street investors, the Federal Reserve, technology companies and other publicly traded companies were involved.
- What
- U.S. stocks rallied as inflation data increased expectations of a Federal Reserve interest-rate hike.
- Where
- U.S. financial markets, including the New York Stock Exchange and Nasdaq markets.
- When
- Friday, following August inflation data; the expected rate decision was scheduled for Wednesday.
- Why
- Investors responded to stronger inflation data, expectations for tighter monetary policy, falling oil prices and strong corporate results.
Rate-Hike Supporters
Market Cautioners
Federal Reserve policy
Rate-Hike Supporters
Strong inflation data and the nearly 90% futures-implied probability suggested a rate increase would help keep inflation under control.
Market Cautioners
Investors remained concerned about inflation and rising long-term Treasury yields, which had contributed to recent market nervousness.
Stock-market outlook
Rate-Hike Supporters
A strong earnings outlook, corporate results and Friday’s gains supported continued optimism about stocks.
Market Cautioners
The S&P 500 was still about 2% below its August 13 record close, while concerns about costly artificial-intelligence data-center construction persisted.
Energy prices
Rate-Hike Supporters
Oil prices retreated during Friday’s session, easing some immediate market pressure.
Market Cautioners
Brent crude remained above $104 a barrel and more than 9% higher for the week because of concerns about supply disruptions along Middle East shipping routes.
Key facts
- August CPI
- Consumer prices rose 0.4%, compared with a 0.1% increase in July.
- Rate-hike probability
- Interest-rate futures implied nearly a 90% chance of a Federal Reserve increase at its Wednesday meeting.
- S&P 500
- Rose 0.99% to 7,666.77 points.
- Nasdaq
- Gained 1.08% to 26,363.39 points.
- Dow Jones Industrial Average
- Advanced 1.08% to 52,625.63 points.
- Technology shares
- Dell rose 11%, Hewlett Packard Enterprise gained 10% and HP climbed 6.5%.
- Oil
- Brent crude fell about 3% but remained above $104 a barrel and more than 9% higher for the week.
Quotes
Thomas Martin
Senior portfolio manager at GLOBALT Investments in Atlanta
“That's pretty much as close to a slam dunk as you're going to get. The Fed will do the right thing and raise rates, and that is good at the margin for keeping inflation in check.”
livemint.com
Sources
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