Inflation Data Drives Fed Hike Odds to 87 Percent
Consumer price index data pushed the probability of a September Federal Reserve rate hike to 87 percent. Market volatility rose as bond yields and oil prices hit multi-month highs.
The probability of a Federal Reserve rate increase in September reached 87 percent. This figure marks a sharp rise from 58 percent the previous week. The shift reflects strong inflation data released over the last week.
Consumer prices rose 0.4 percent month over month. Headline inflation stands at 3.4 percent year over year. Core inflation increased 0.3 percent, slightly exceeding market expectations. These figures are the final major indicators before the Fed's September meeting.
Oil and yields drive market stress
West Texas Intermediate crude oil exceeded $100 per barrel. This was the first time in nearly four months. The price spike followed escalating tensions between the United States and Iran. Crude oil rose more than 9 percent during the week.
The 10-year Treasury yield topped 4.95 percent. This level is the highest since October 2023. Rising energy costs are fueling concerns about persistent inflation. Investors now expect the Fed to maintain a hawkish stance.
Stocks end week in negative territory
The Dow Jones Industrial Average fell 1.6 percent for the week. The S&P 500 declined 0.8 percent. The Nasdaq dropped 0.7 percent. Friday trading saw gains of nearly 1 percent across all three indices. These gains were not enough to offset the earlier losses.
The market broke a four-session losing streak on Friday. Crude oil prices and bond yields retreated slightly. This pause provided temporary relief to traders. The broader weekly trend remained negative due to macroeconomic pressures.
Tech giants show resilience amid volatility
Meta Platforms gained 5 percent during the week. The company launched new artificial intelligence models and agents. These tools integrate with its social media platforms. The stock trades at 19 times 2027 earnings estimates. Analysts view this valuation as attractive given revenue growth of 20 percent.
Apple shares rose nearly 4 percent. The company introduced the foldable iPhone Duo. The starting price is $1,999. The iPhone 18 Pro models also saw price increases. According to GN markets/inflation (en-US), these moves signal continued investment in hardware and AI capabilities.
