S&P 500 Rises 0.86% as Fed Hike Odds Hit 90%
US stocks closed higher on Friday after August inflation data confirmed that the Federal Reserve will raise interest rates next week.
The S&P 500 index gained 0.86% to close at 7,656.98 points. This marks a recovery from recent volatility driven by inflation concerns. The Nasdaq Composite rose 0.96% to reach 26,333.04 points. The Dow Jones Industrial Average increased by 0.98% to finish at 52,573.29 points.
Market participants reacted to new consumer price data released this week. Gasoline costs rebounded after two months of declines. This development strengthened the case for tighter monetary policy. Investors adjusted their expectations for the upcoming Federal Reserve meeting.
Fed Rate Hike Probability Reaches 90%
Interest rate futures now price in a 90% chance of a rate increase. This figure is up from 72% on Thursday. The CME FedWatch tool tracks these probabilities closely. The next policy decision is scheduled for Wednesday.
Thomas Martin, a senior portfolio manager at GLOBALT Investments, described the situation as a near certainty. He stated that the Fed will act to control inflation. This move is viewed as beneficial for long-term price stability.
Tech Stocks Drive Sector Gains
Dell Technologies shares surged 12% to a record high. Hewlett Packard Enterprise jumped 12% and HP gained 8.4%. These moves followed strong quarterly results from Oracle. Oracle stock dipped 1.8% despite the positive earnings surprise.
Communication services led sector performance with a 1.35% gain. Consumer discretionary stocks followed with a 1.13% increase. Nine of the eleven S&P 500 sector indexes closed higher. ACV Auctions soared 44% after Copart agreed to acquire it for nearly $1.9 billion.
Oil Prices Fall Amid Supply Concerns
Brent crude futures slipped almost 3% on Friday. Prices remained above $104 per barrel. The weekly gain for oil stands at approximately 9%. Shipping disruptions in the Middle East continue to weigh on supply expectations.
Trading volume was light at 14.0 billion shares. This is below the 20-session average of 14.9 billion shares. The CBOE Volatility Index fell to 15.88. Advancing stocks outnumbered decliners by a ratio of 2.1 to 1.
