Inflation Data Boosts Stocks and Gold, But Oil Volatility Remains a Wildcard

US stocks and gold rallied last week as inflation data eased concerns that the Federal Reserve would raise interest rates again. The S&P 500 gained 0.4% for the week, with the Nasdaq adding 0.1%. However, Friday's late pullback showed how quickly market sentiment can shift.

Weak US retail sales and renewed tensions around the Strait of Hormuz reminded traders that the inflation and growth debate is far from settled. Gold reached a two-month high after the CPI release, while Brent crude posted a sharp weekly gain as tanker attacks and stalled US-Iran talks brought supply disruption back into focus.

The AI trade remained a major force in markets, but memory-chip stocks showed that investors are becoming less forgiving when expectations are high. SanDisk's investor day helped lift sentiment towards parts of the memory chain, but Applied Materials' results and outlook failed to clear the market's high bar, while broader chip shares weakened.

The key theme is whether this week's softer inflation data marks a durable easing in price pressure or simply a pause before higher energy costs flow through again. As traders head into the new week, they will be watching developments around the Strait of Hormuz and volatility in global technology shares.