S&P 500 Rises 0.9% as Oil Cools and Inflation Data Aligns with Forecasts
US equities rebounded Friday, breaking a four-day losing streak as Brent crude retreated from recent peaks. The S&P 500 gained 0.9%, supported by consumer price data that matched market expectations.
The S&P 500 index climbed 0.9% on Friday, ending a four-day decline. This was the longest losing streak since June. The Dow Jones industrial average jumped 509 points, or 1%. The Nasdaq composite also rose 1%.
Brent crude oil fell 2.8% to settle at $104.61 per barrel. Prices had previously approached $110 overnight. This pullback reduced pressure on inflation metrics. US consumer prices rose 3.4% year-over-year in the latest report.
Bond yields reflect rate hike expectations
Traders increased bets on a Federal Reserve interest rate hike next week. The yield on the two-year Treasury rose to 4.62% from 4.56%. This move signals expectations for tighter monetary policy. Longer-term yields remained relatively stable.
The 10-year Treasury yield edged up to 4.97% from 4.95%. The 30-year yield decreased slightly to 5.36% from 5.37%. Investors view potential hikes as a mechanism to control long-term price growth. This stance aims to restore credibility to the central bank.
Consumer sentiment declines across political lines
University of Michigan data showed a drop in consumer confidence. Sentiment fell among both Democrats and Republicans. Expected inflation for the next year jumped to 4.6% from 4%. This is the highest reading since June.
Rising inflation expectations can create a self-reinforcing cycle. This dynamic complicates the Federal Reserve's task of stabilizing prices. President Trump has advocated for lower rates. Federal Reserve Chairman Kevin Warsh declined to signal specific rate paths.
Sector movers lead broader market gains
Kroger shares rose 2.7% after posting higher quarterly profits than expected. The company maintained its full-year profit forecast. It trimmed its revenue growth outlook slightly. ACV Auctions surged 44.2% following a buyout offer.
Copart agreed to acquire ACV Auctions for $10.50 per share in cash. Copart stock fell 2.6% on the announcement. Copart sold over 4 million vehicles in the last year. These corporate moves contributed to the broader market recovery reported by GN markets/inflation.
