NEW YORK (AP) — U.S. stocks are rebounding Friday and clawing back much of their losses for the week after oil prices eased off their recent spurt. An update on inflation across the United States that came in close to economists’ expectations also helped calm the market.
The S&P 500 jumped 1.1% and was on track to break a four-day losing streak, its longest since June. The Dow Jones Industrial Average was up 631 points, or 1.2%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 1.1% higher.
They got some help from a pullback in oil prices, which jumped earlier this week to their highest levels since May because of the ongoing war with Iran. The price for a barrel of Brent crude, the international standard, fell 3% to $104.42 after getting near $110 overnight.
That took some pressure off inflation, which remains far higher than anyone would like. A report on Friday showed that U.S. consumers had to pay prices for gasoline, food and other costs of living that were 3.4% higher last month than a year earlier.
While inflation continues to be painfully high, Friday's data came in close to what economists expected and traders were prepared for. It also firmed expectations on Wall Street that the Federal Reserve will feel compelled to hike its main interest rate at its meeting next week.
Such moves are the typical way the Fed tries to rein in high inflation, and they work by filtering through the bond market, making it more expensive for everyone to borrow money, slowing the economy and hopefully removing fuel for further inflation.
The rising expectations for rate hikes sent the yield of the two-year Treasury, which moves with guesses for upcoming Fed action, to 4.57% from 4.56% late Thursday.
Longer-term yields, though, actually eased. That could be an indication that investors in the bond market see upcoming hikes to rates by the Fed helping to keep control of inflation over the longer term.
The yield on the 10-year Treasury fell to 4.92% from 4.95% late Thursday.
On Wall Street, Oracle climbed 2.6% after the tech giant reported stronger profit and revenue for the latest quarter than analysts expected.
In stock markets abroad, indexes rose in Europe, and London’s FTSE 100 added 0.8% after a report said the U.K. economy was stronger in July than economists expected.
Stock markets were weaker in Asia, where Japan’s Nikkei 225 lost 1.9% and South Korea’s Kospi fell 1.8%.
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AP Business Writers Chan Ho-him and Michelle Chapman contributed to this report.
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