US stocks rise as CPI lifts odds of 25-basis-point Fed hike to 88%

  • US stock indexes closed higher after oil prices fell 2.4% Friday.
  • The S&P 500 rose 0.86%, while the Dow and Nasdaq 100 gained 0.98% and 0.91%.
  • Markets raised the implied odds of a September 15-16 Fed hike to 88%.

US stocks closed higher Friday after a 2.4% decline in oil prices, with the S&P 500 rising 0.86%, the Dow gaining 0.98% and the Nasdaq 100 advancing 0.91%. August headline CPI rose 0.4% month over month, matching expectations, while core CPI increased 0.3%, above the 0.2% forecast. Year-on-year headline inflation held at 3.4%, and core inflation eased to 2.4%, its lowest level in 5.5 years. Markets raised the implied probability of a 25-basis-point FOMC (Federal Open Market Committee) rate hike on September 15-16 to 88% from 75% on Thursday. Weaker University of Michigan consumer sentiment and higher inflation expectations offset some of the support from falling oil prices. Oil still gained 9% for the week despite Friday's decline, while Treasury yields moved modestly higher. Chipmakers, crypto-related stocks and Dell Technologies were among the stronger performers, while Oracle reversed its initial overnight gains.

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