Key facts
- US stocks rebounded Friday, with the S&P 500 climbing 1% and the Dow Jones Industrial Average up 479 points.
- Oil prices eased, with Brent crude falling 2.5% to $104.93 a barrel.
- US consumer prices rose 3.4% in August from a year earlier, near economists' expectations.
- Traders increased expectations for a Federal Reserve interest rate hike at its upcoming meeting.
- The yield on the two-year Treasury rose to 4.60%, while the 10-year Treasury yield fell to 4.93%.
- Oracle reported stronger-than-expected profit and revenue for its latest quarter.
U.S. stock indexes rebounded on Friday, recovering significant losses from the week as oil prices eased and strong corporate earnings provided support. The S&P 500 climbed 1% and was on track to break a four-day losing streak, while the Dow Jones Industrial Average gained 479 points and the Nasdaq composite was 1.2% higher.
Oil prices pulled back from recent highs, with Brent crude falling 2.5% to $104.93 a barrel after touching near $110 overnight. This eased some pressure on inflation, which remains a key concern. A report released Friday indicated that U.S. consumer prices rose 3.4% in August compared to a year earlier, a figure that was close to economists' expectations.
The inflation data, while still elevated, strengthened expectations among traders that the Federal Reserve will likely raise its main interest rate at its upcoming meeting. This expectation was reflected in the bond market, with the yield on the two-year Treasury rising to 4.60% from 4.56% late Thursday. Conversely, longer-term yields eased, with the 10-year Treasury yield falling to 4.93% from 4.95%, potentially signaling investor confidence that future rate hikes will help control inflation over the long term.
In corporate news, Oracle's stock rose 0.7% after the tech giant reported profit and revenue that exceeded analyst expectations, offering a positive signal for AI-related stocks. Kroger also saw a 4.2% increase after reporting a stronger profit for its latest quarter and maintaining its full-year profit forecast, despite trimming a key revenue growth measure.