The S&P 500 Index ($SPX) (SPY) rose +0.89%, the Dow Jones Industrial Average ($DOWI) (DIA) gained +0.81%, and the Nasdaq 100 Index ($IUXX) (QQQ) climbed +0.95%. E-mini S&P futures (ESU26) are up +0.82%, and September E-mini Nasdaq futures (NQU26) are up +0.85%.
Equity indexes moved higher on the day, bolstered by a decline of more than -2% in crude oil prices. Both the stock and bond markets absorbed this week’s CPI report without significant disruption. August core CPI printed at +0.3% month-over-month, modestly above the +0.2% consensus, while headline CPI came in at +0.4% m/m, matching expectations. Treasury prices edged slightly higher despite the market raising the probability of an FOMC rate hike at next week’s meeting to 88%, up from 75% on Thursday.
August’s headline CPI reading of +0.4% m/m aligned with market expectations, though the core CPI figure of +0.3% m/m came in slightly above the anticipated +0.2%. On a year-over-year basis, August CPI held steady at +3.4% y/y, unchanged from July and consistent with forecasts. Core CPI on an annual basis eased to +2.4% y/y from July’s +2.5%, marking a 5.5-year low and in line with expectations.
Following the CPI release, markets increased the likelihood of a +25 basis point rate hike by the FOMC at its September 15-16 meeting to 88%, up from 75% on Thursday.
Equity sentiment was also tempered by a weaker-than-expected consumer sentiment reading. The University of Michigan’s preliminary September consumer sentiment index declined 3.9 points to 47.8, missing the market expectation of a 0.6-point drop to 51.3.
Adding to the negative tone, the University of Michigan reported that September one-year consumer inflation expectations rose to +4.6% from +4.0% in August, exceeding the forecast of +4.2%. Five-to-ten-year inflation expectations increased to +3.4% from +3.3%, also stronger than the anticipated +3.3%.
The ongoing U.S.-Canada trade dispute continued to weigh on market sentiment. On Tuesday, Canada announced tariffs ranging from 15% to 50% on hundreds of U.S. goods, retaliating against last month’s U.S. imposition of 50% tariffs on $20 billion in Canadian imports. The U.S. responded by restricting imports of select Canadian products, applying additional tariffs, and moving to bar Canadian firms from government contracting.
October WTI crude oil futures (CLV26) fell more than -2% today, partially retracing Thursday’s +6.7% surge to a 3.5-month high. Despite remaining significantly higher on the week, oil gave back gains after the International Energy Agency warned that elevated prices and constrained supply could drive the largest decline in global oil demand this year since the Covid-19 pandemic.
Reports surfaced that two vessels were struck by unidentified projectiles near Oman on Thursday, reportedly by Iran. Additionally, Axios reported that Saudi Crown Prince Mohammed bin Salman called President Trump twice on Thursday, urging a renewed military operation against the Houthis in Yemen, who have expanded their territorial control near the critical Bab el-Mandeb Strait and have targeted Saudi oil infrastructure. Saudi Arabia told OPEC that its August crude production fell to 6.238 million barrels per day, the lowest level since 1990.
Overseas markets finished mixed. The Euro Stoxx 50 gained +0.66%. China’s Shanghai Composite closed down -1.18%, and Japan’s Nikkei-225 declined -1.91%.
Interest Rates
December 10-year Treasury futures (ZNZ6) rose +1 tick. The 10-year Treasury yield fell 3.1 basis points to 4.932%, following Thursday’s +11 basis point spike to a 2.75-year high of 4.963%. Treasury prices shrugged off the CPI report and heightened rate-hike odds, trading higher on the day’s decline in oil prices. The 10-year break-even inflation rate slipped 3.9 basis points to 2.378%, retreating from Thursday’s 3.25-month high of 2.42%.
European government bond yields were mixed. Germany’s 10-year bund yield reached a new 24-year high of 3.532% and rose 1.1 basis points to 3.512%. The 10-year UK gilt yield touched a 19-year high of 5.380% before pulling back, settling 3.2 basis points lower at 5.342%.
Markets are pricing in a 78% probability of a +25 basis point ECB rate hike at the central bank’s next meeting on October 29. The ECB raised its deposit facility rate by 25 basis points to 2.50% at this week’s meeting, as expected, and indicated inflation will remain above 2% for an “extended period.”
US Stock Movers
Oracle (ORCL) advanced +0.6% after reporting late Thursday that cloud infrastructure revenue jumped +121% to $7.4 billion, surpassing consensus estimates of $7.2 billion. Co-CEO Clay Magouyrk stated, “We are delivering data center and GPU capacity at a pace that would have seemed impossible only a year ago.” Oracle also disclosed more than $30 billion in AI cloud contracts booked during the latest quarter, above expectations. Fiscal first-quarter revenue grew +30%, and adjusted EPS of $1.92 exceeded the $1.75 consensus.
Oracle’s results lifted other cloud infrastructure names, with Applied Digital (APLD) gaining more than +2% and CoreWeave (CRWV) rising over +1%.
Semiconductor stocks rallied broadly on the Oracle tailwind, with TI (TXN), ON Semiconductor (ON), and Analog Devices (ADI) each advancing more than +4%.
The Magnificent Seven all traded higher, led by gains exceeding +2% in Apple (AAPL) and Alphabet (GOOGL). Apple received continued support following the launch of its new iPhone Duo, the company’s first foldable smartphone.
Microsoft (MSFT) edged higher after revealing plans for a significant data center expansion aimed at tripling its computing capacity, as current supply constraints force the company to turn away prospective AI and cloud clients.
Crypto-related stocks rallied alongside a roughly +2% advance in bitcoin. Mara Holdings (MARA) surged more than +7%, while Strategy (MSTR) and Coinbase (COIN) each gained over +5%.
Adobe (ADBE) was little changed after issuing slightly cautious guidance, raising concerns that AI technology could erode software revenue.
Dell Technologies (DELL) rallied more than +10% after RBC Capital Markets initiated coverage with an outperform rating and a $640 price target, citing strong expectations for AI infrastructure demand.
Earnings Reports (9/11/2026)
Kroger Co (KR) and Rent the Runway Inc (RENT).