US Stocks Rebound as Oil Eases and Inflation Data Meets Forecasts
The S&P 500 climbed 1% Friday, ending a four-day losing streak. Brent crude fell 2.3% to $105.12, easing pressure on prices. Core inflation remained at 3.4% year-over-year. Markets are pricing in a Federal Reserve rate hike next week.
The S&P 500 rose 1% on Friday, breaking a four-day losing streak. The Dow Jones Industrial Average gained 575 points, or 1.1%. The Nasdaq composite also climbed 1.1%. These gains followed a pullback in energy costs and stable inflation data.
Brent crude prices fell 2.3% to $105.12 per barrel. The benchmark had approached $110 overnight. This decline reduced immediate pressure on consumer prices. U.S. consumer prices rose 3.4% in the latest month compared to a year earlier.
Inflation Data Meets Market Expectations
The inflation report aligned closely with economist forecasts. Prices for gasoline, food, and living costs remain elevated. The 3.4% year-over-year increase is consistent with recent trends. This stability helped calm investor nerves during the session.
Traders are now pricing in a higher probability of a Federal Reserve rate hike. The central bank is expected to act at its meeting next week. Rate hikes aim to reduce borrowing costs and slow economic activity. This mechanism helps curb persistent price increases.
Treasury Yields Reflect Policy Expectations
The yield on the two-year Treasury rose to 4.61%. It started the day at 4.56%. This move signals expectations for tighter monetary policy soon. Longer-term yields showed a different trend.
The 10-year Treasury yield edged down to 4.95%. It was also 4.95% late Thursday. This slight decline suggests investors see future hikes as effective. They believe these actions will control inflation over the long term.
Corporate Earnings Drive Sector Gains
Kroger shares rose 2.5% after reporting stronger quarterly profits. The company met analyst expectations for earnings. It maintained its full-year profit forecast. However, it trimmed its outlook for underlying revenue growth.
ACV Auctions stock soared 44.5% on Friday. Copart announced it will acquire the company. The deal values shares at $10.50 in cash. Copart shares rose 1.2% following the announcement. Oracle initially jumped after beating earnings estimates. The gain faded as trading continued.
