Stocks and Treasuries Regain Ground Ahead of CPI: Markets Wrap
(Bloomberg) — US stocks and Treasuries caught some respite as oil prices eased, with traders looking to August’s US inflation report for a telling signal on whether the Federal Reserve will hike interest rates next week.
After surging yields and a rally in crude left the S&P 500 facing its worst week since June, futures for the index rebounded 0.5%. Europe’s Stoxx 600 climbed 0.6%. Oracle Corp. jumped 6% in early trading as its data center bets showed signs of paying off.
Brent fell toward $104 a barrel. While the benchmark is still on track for a 8% jump since Monday, the International Energy Agency warned higher prices would hit consumption. Treasuries rose, led by the three-year tenor. The dollar barely budged.
Traders are bracing for Friday’s inflation print at a time when worries over oil-driven price pressures have pushed global bond yields to the highest in years. Money markets price a 67% chance of a Fed hike next week.
Economists expect the consumer price index to have risen 0.4% in August, an acceleration from a month earlier, due in part to higher gasoline costs.
Stripping out the volatile energy and food components, the core CPI is projected to show a more moderate 0.2% increase.
“We had the Oracle numbers as a reminder that there’s a tech story that’s still very, very vibrant,” said Guy Miller at Zurich Insurance. “That’s what investors keep coming back to. We know for at least the next two quarters that earnings are going to be really robust.”
Markets in Asia echoed Thursday’s US moves. Australia’s three-year yield jumped as much as 20 basis points to 5.05%, its highest level since 2011, while New Zealand’s two-year yield climbed 25 basis points. MSCI Inc.’s equity gauge for the region fell 1.2%.
In the latest developments in the Middle East, Iran-backed Houthi militants in Yemen advanced toward Red Sea coastal areas bordering the Bab el-Mandeb Strait. A successful push could tighten their grip on the waterway and threaten deeper disruption to a second route for shipments from the region.
Crude’s inflationary impact was again evident in US diesel prices rising above $6 a gallon for the first time ever.
“Equity markets will most likely be driven by bond yields and oil prices for the coming days,” said Raphael Thuin at Tikehau Capital. “There is no panic at the moment, but one can feel some concerns rising on second-round inflation, even if we’re not there yet.”
While long-term yields are likely to continue to rise, strong earnings will help shield US stocks from a drawdown, said Kevin Thozet at Carmignac.
“Earnings growth expectations are such that they seem to be able to handle a rise in the cost of capital,” Thozet said. “We’re still quite confident and remain invested in the US stock market.”
Corporate Highlights:
OpenAI is considering slowing down the development of cutting-edge artificial intelligence, and the ChatGPT maker’s Chief Executive Officer Sam Altman is hoping other AI companies will do the same. Moonshot AI is targeting a manifold jump in annualized revenue to $2 billion by the end of the year, using the breakout success of its Kimi K3 model to dial up the heat on rivals from Anthropic PBC to Z.AI Co. Anthropic PBC accused China’s artificial intelligence champion Moonshot AI of covertly routing thousands of user requests to the US firm’s Claude models and passing off the responses as its own in a bid to gain an edge in the AI race. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.5% as of 7:46 a.m. New York time Nasdaq 100 futures rose 0.7% Futures on the Dow Jones Industrial Average rose 0.5% The Stoxx Europe 600 rose 0.6% The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index was little changed The euro fell 0.2% to $1.1594 The British pound was little changed at $1.3506 The Japanese yen rose 0.3% to 153.93 per dollar Cryptocurrencies
Bitcoin fell 0.4% to $76,929.48 Ether was little changed at $2,459.05 Bonds
The yield on 10-year Treasuries declined one basis point to 4.95% Germany’s 10-year yield advanced two basis points to 3.52% Britain’s 10-year yield declined three basis points to 5.34% Commodities
West Texas Intermediate crude fell 3.2% to $99.15 a barrel Spot gold rose 0.4% to $4,333.74 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Sujata Rao.
©2026 Bloomberg L.P.
