Stocks Climb in Run-Up to Next Week’s Fed Decision: Markets Wrap

(Bloomberg) — The final stretch of a jittery week on Wall Street saw stocks rising, with a decline in oil prices tempering concerns about inflationary pressures ahead of next week’s Federal Reserve decision.

While money markets see a September Fed hike as an almost done deal after the latest consumer price index, equity buyers stepped in to halt a four-day drop in the S&P 500. Longer-dated Treasuries outperformed — underscoring bets the central bank will act to fight inflation and boost its credibility. Brent crude slipped from a four-month high, helping overall sentiment.

A key reading on consumer prices showed little progress toward the Fed’s goal amid ongoing pressures from the Iran war, tariffs and the data-center buildout.

But the market reaction seemingly suggesting the figures are hot enough to induce Fed tightening may well be a “good thing” at a time of worries about excessively accommodative or inflationary policy choices, noted Peter Williams at 22V Research.

“This is clearly not the inflation report that markets feared, but neither is it the report that settles the US inflation question once and for all,” said Florian Ielpo at Lombard Odier Investment Managers.

Following the release, markets reversed part of the “negative price action” seen over recent days, he added.

“There’s no guarantee that the Fed will hike next week, but it’s hard to see how the central bank can justify leaving rates on hold,” said Chris Zaccarelli at Northlight Asset Management.

With August measures of core inflation coming in warmer than would ideally be the case, the upcoming Fed decision looms even larger than it did before, according to Jim Baird at Plante Moran Financial Advisors.

“Will their broad reading of economic conditions remain sufficiently benign for them to hold steady for now or will the moderate re-acceleration in inflation represent a tipping point that nudges them to hike?” he said. “If policymakers choose to stand pat again, the questions surrounding what they’re waiting for will become louder and more direct.”

At eToro, Bret Kenwell says the Fed will find it harder to avoid a hike next week with the labor market still resilient and monthly core inflation firming. But the bigger question, he notes, is what comes afterwards.

“If the Fed presents the move as insurance against renewed inflation rather than the beginning of a prolonged hiking cycle, markets could interpret it as a ‘dovish hike’,” he said. “That could limit further upward pressure on longer-term Treasury yields, even while short-term yields remain elevated.”

Corporate Highlights:

Oracle Corp. delivered quarterly cloud computing revenue that exceeded Wall Street’s expectations, though the company’s gross margins narrowed. Apple Inc.’s new always-listening AI features for the Apple Watch Series 12 and Ultra 4 could put eavesdropping laws to the test, according to legal experts. Microsoft Corp. plans to more than triple its data-center capacity, an effort that could help the company overcome a computing shortage that has forced it to turn away some AI and cloud business. Anthropic PBC says its AI model Claude has been misused in attempts to develop a wide range of military applications, including kamikaze drone swarms, missile navigation systems and research tied to potential biological weapons. OpenAI is considering slowing down the development of cutting-edge AI, and the ChatGPT maker’s Chief Executive Officer Sam Altman is hoping other companies will do the same. Some of the main moves in markets:

Stocks

The S&P 500 rose 0.9% as of 4 p.m. New York time The Nasdaq 100 rose 0.9% The Dow Jones Industrial Average rose 1% The MSCI World Index rose 0.6% Currencies

The Bloomberg Dollar Spot Index was little changed The euro fell 0.1% to $1.1596 The British pound rose 0.1% to $1.3528 The Japanese yen rose 0.5% to 153.68 per dollar Cryptocurrencies

Bitcoin rose 0.3% to $77,439.13 Ether rose 3.4% to $2,545.44 Bonds

The yield on 10-year Treasuries advanced one basis point to 4.97% Germany’s 10-year yield was little changed at 3.50% Britain’s 10-year yield declined three basis points to 5.34% The yield on 2-year Treasuries advanced four basis points to 4.63% The yield on 30-year Treasuries was little changed at 5.36% Commodities

West Texas Intermediate crude fell 2% to $100.44 a barrel Spot gold rose 0.7% to $4,349.06 an ounce ©2026 Bloomberg L.P.