Wall Street Rebounds as Oil Retreats, Inflation Data Matches Forecasts

US stocks staged a sharp rebound on Friday, breaking a four-day losing run as falling oil prices and a key inflation report that met forecasts helped calm investor nerves.

The S&P 500 gained 76.39 points, or 1%, to 7,671.61, according to market data from NDTV Profit. The Dow Jones Industrial Average surged 644.81 points, or 1.24%, to 52,713.39, while the Nasdaq Composite rose 268.52 points, or 1.05%, to 26,355.83. The four-day slide had been the longest such stretch for the S&P 500 since June, the Times of India reported.

**Oil Retreats From Multi-Month Highs**

Crude prices pulled back after surging earlier in the week on escalating Middle East tensions. West Texas Intermediate futures fell 3% to $99.28 a barrel, while Brent crude declined 3.1% to $104.32 a barrel, per NDTV Profit. The Times of India reported Brent had approached $110 overnight before dipping 2.5% to $104.93. Despite Friday’s decline, both benchmarks remained on track for weekly gains of around 8%, NDTV Profit noted.

The retreat followed reports that Gulf states are considering a meeting with Iranian officials to discuss the future of the Strait of Hormuz, Zero Hedge reported, citing the first such gathering since the conflict began more than six months ago. The situation in the Middle East remains fluid, with Houthi rebels seizing a key Yemeni port city and striking Saudi oil infrastructure, the same source added.

**Inflation Data Largely In Line**

The Bureau of Labor Statistics reported that the Consumer Price Index (CPI) rose 0.4% in August from July, putting the annual inflation rate at 3.4%, matching the figure from July. Core CPI, which excludes food and energy prices, increased 0.3% month over month, the report showed, according to The American Conservative.

The data reinforced expectations that the Federal Reserve will raise interest rates at its policy meeting next week. According to the CME Group’s FedWatch tool, markets were pricing in an 85.6% probability of a 25-basis-point rate hike, NDTV Profit reported. Longer-term Treasury yields edged lower, with the 10-year yield falling to 4.93% from 4.95% on Thursday, while the two-year yield rose to 4.60%, reflecting rate-hike expectations, the Times of India noted.

**Fed’s Preferred Gauge Runs Hotter**

Investors looking for a firmer signal on the Fed’s intentions may find the central bank’s preferred inflation measure more telling. The Personal Consumption Expenditures (PCE) price index – which the Fed uses as its primary inflation target – has remained stickier than the CPI, with a trailing 12-month rate of 3.7% in both June and July, according to a Nasdaq.com analysis. The report noted that Fed Chair Kevin Warsh has described the 2% PCE target as a “firm, fixed target,” and that the persistently higher reading makes a rate hike at the Sept. 16 FOMC meeting more likely than not.

**Consumer Sentiment Dips, Inflation Expectations Rise**

Adding to policymakers’ challenges, a preliminary University of Michigan survey showed US consumer sentiment falling on Friday, the Times of India reported. Consumers’ expectations for inflation over the coming year rose to 4.6% from 4% last month, the highest reading since June. Rising inflation expectations can set off a self-reinforcing cycle that worsens inflation, the report noted.

**Corporate Highlights**

Oracle shares jumped 6% in premarket trading after the company reported fiscal first-quarter results that beat estimates, with cloud infrastructure revenue surging 121% to $7.4 billion, according to Zero Hedge. The company’s remaining performance obligations hit a record $664 billion, comfortably exceeding analyst projections.

Microsoft also gained attention, with the company announcing plans to more than triple its data center capacity to 38 gigawatts by 2032 to ease computing shortages, Zero Hedge reported.

Adobe fell 4% in premarket trading after giving a sales outlook that narrowly missed analyst estimates, raising concerns about AI monetization for software incumbents.

**Global Markets Mixed**

European stocks moved higher as oil prices eased. London’s FTSE 100 gained 0.5% after data showed the UK economy was stronger in July than economists expected, the Times of India reported. Asian markets declined, with Japan’s Nikkei 225 falling 1.9% and South Korea’s Kospi dropping 1.8%.

The recovery on Wall Street was broad but not uniform, and the coming week’s Fed decision – now widely expected to deliver a rate increase – will test whether the rebound can hold.