S&P 500 Rebounds as Oil Eases and Inflation Data Meets Expectations

The S&P 500 rose 1.1% on Friday, ending a four-day losing streak that was the longest since June. The Dow Jones Industrial Average gained 578 points, or 1.1%, while the Nasdaq composite climbed 1.2% as of 1:49 p.m. Eastern time. This rebound followed a recent period of volatility driven by energy costs and economic data.

Brent crude prices fell 3.1% to $104.32 after reaching near $110 overnight. This pullback occurred after oil prices hit their highest levels since May due to the ongoing conflict with Iran. The reduction in energy costs provided immediate relief to market participants monitoring inflation trends.

Inflation Data Aligns With Forecasts

U.S. consumer prices rose 3.4% year-over-year last month, according to a report released Friday. This figure was close to the expectations of economists cited by GN markets/inflation (en-US). Although the rate remains high, the alignment with forecasts helped stabilize market sentiment. Traders now expect the Federal Reserve to hike its main interest rate at its upcoming meeting.

The yield on the two-year Treasury increased to 4.63% from 4.56% late Thursday. This change reflects market pricing for future Federal Reserve actions. The yield on the 10-year Treasury remained steady at 4.95%. Rising interest rates make borrowing more expensive, which aims to slow economic activity and reduce inflationary pressure.

Consumer Sentiment Declines

A preliminary report from the University of Michigan showed that U.S. consumer sentiment is falling. The decline affected both Democratic and Republican households. One-year inflation expectations jumped to 4.6% from 4.0% last month. This is the highest reading since June, raising concerns about a potential feedback loop that could worsen inflation.

Corporate Earnings Drive Sector Moves

Kroger shares rose 2.7% after the grocer reported quarterly profits that exceeded analyst estimates. The company maintained its full-year profit forecast despite trimming its revenue growth outlook. ACV Auctions surged 44.5% after Copart announced a cash acquisition offer of $10.50 per share. Copart stock rose 1.2% on the same news. Oracle shares faded from an early 8.5% gain to a 0.3% loss despite strong quarterly results.