Dow Gains 509 Points as Oil Prices Cool

The Dow Jones Industrial Average advanced 509.19 points on Friday. This gain of 0.98% brought the index to 52,573.29. The move snapped a four-session losing streak for the benchmark. The S&P 500 rose 0.86% to close at 7,656.98. The Nasdaq Composite gained 0.96% to finish at 26,333.04. These rallies reversed the declines seen in the previous four trading days.

Oil prices retreated from their recent highs. West Texas Intermediate futures dropped 2.4% to settle at $100.05 per barrel. Brent futures slid 2.8% to $104.61 per barrel. This easing in energy costs helped stabilize equity markets. Investors also digested the latest U.S. inflation data without major panic. The market focused on broader economic stability rather than immediate rate shocks.

Inflation data matches expectations

The consumer price index rose 0.4% month over month in August. Year over year, the index climbed 3.4%. These figures matched estimates from Dow Jones. Core CPI, which excludes energy and food, increased 0.3% from the previous month. This core figure was slightly higher than expected. Higher energy prices continue to exert upward pressure on consumer goods.

WTI crude rallied nearly 10% this week despite the Friday drop. Brent crude gained almost 9% over the same period. These weekly gains reflect escalating tensions in the Middle East. The persistent rise in energy costs complicates the inflation outlook. Markets remain sensitive to shifts in geopolitical risk. Energy prices are a key variable in current economic models.

Fed hike probability rises

The two-year Treasury yield topped 4.6% on Friday. This level marks the highest since July 2024. The CME Group FedWatch tool shows an 86% chance of a quarter-point rate hike next week. Traders are pricing in multiple potential increases this cycle. The debate has shifted from if the Fed will hike to how many hikes are required. Seema Shah of Principal Asset Management expects more than one hike. Policymakers aim to re-establish price stability after years of above-target inflation.

Weekly performance remains negative

Despite the Friday rebound, the Dow fell 1.6% for the week. The S&P 500 declined 0.8% over the five-day period. The Nasdaq dropped about 0.7%, its first negative week in three sessions. The four-day losing streak was the longest for the Dow since late April. Markets are digesting the combined impact of energy costs and monetary policy. Investors watch for further signals on the Federal Reserve's trajectory.