New York Stocks Rebound After Five Trading Sessions on Falling Oil Prices and Easing CPI Uncertainty

[Financial News] U.S. stocks rose after five trading sessions, buoyed by falling international oil prices and reduced uncertainty following the release of the Consumer Price Index (CPI). Expectations that the Federal Reserve System (Fed) would raise interest rates grew stronger, but investor sentiment recovered as the inflation data did not deliver an additional shock to the market.
On the 11th (local time), the Dow Jones Industrial Average (DJIA) closed at 52,573.29, up 509.19 points, or 0.98%, from the previous session, on the New York Stock Exchange (NYSE). The S&P 500 Index rose 65.28 points, or 0.86%, to 7,656.98, while the NASDAQ Composite Index gained 251.31 points, or 0.96%, to 26,333.04.
International oil prices, which had surged recently amid heightened tensions in the Middle East, fell and eased pressure on stocks. Reports that Middle Eastern countries were seeking a temporary agreement on vessel traffic through the Strait of Hormuz prompted profit-taking.
November Brent crude oil futures settled at $104.61 per barrel, down $3.02, or 2.81%, from the previous session. October West Texas Intermediate crude oil (WTI) futures closed at $100.05, down $2.43, or 2.37%. Brent crude oil fell for the first time in six trading sessions, while WTI declined for the first time in nine sessions.
U.S. CPI for August, released that day, rose 0.4% from the previous month and 3.4% from the same month a year earlier, in line with market expectations. Core CPI, excluding energy and food, increased 0.3% month over month, slightly exceeding the forecast of 0.2%, but did not significantly heighten market concerns.
However, expectations that the Fed will raise interest rates at next week’s Federal Open Market Committee (FOMC) meeting gained further momentum. According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of a 0.25-percentage-point rate hike priced into the futures market rose to 86.3% on Wednesday afternoon from 72.4% the previous day.
U.S. Treasury yields also came under upward pressure amid expectations of a rate hike. The 10-year Treasury yield climbed to around 4.99% intraday immediately after the CPI release, before paring its gains to the low-to-mid 4.9% range.
A senior portfolio manager at Globalt Investments said, "The possibility of a Fed rate hike is close to a foregone conclusion. The Fed will make the right decision and raise rates, which will be positive for curbing inflation."
[email protected] Choi Doo-sun Reporter