Wall Street rises after August CPI and Fed outlook

U.S. stocks rose after August CPI met expectations at 3.4%. The market now sees a higher chance of a Fed rate hike, with yields and oil prices elevated.

U.S. stock futures climbed ahead of the August CPI report, with the Dow Jones up by as much as 300 points and the S&P 500 and Nasdaq also trending higher. The CPI indicated a 0.4% monthly and 3.4% annual increase, aligning with forecasts but slightly above July’s numbers. Following the report, major indices reversed earlier losses and closed nearly 1% higher, ending a four-session losing streak. The data increased the likelihood of a Fed rate hike to between 65% and 87%. Meanwhile, 10-year Treasury yields neared 5%, and Brent crude oil prices surpassed $100 per barrel amid ongoing geopolitical tensions. Markets responded positively to the clearer monetary policy outlook, though concerns persist if core inflation remains high. Analysts suggested strategies such as buying long-term bonds or reducing exposure to tech funds, depending on inflation and yield trends.