US Stocks Rebound as Oil Prices Eases, Fed Rate Hike Expectations Rise

The US stock market rebounded this week after oil prices eased off their recent surge, which had caused concerns about inflation. The S&P 500 index climbed 0.9% and broke a four-day losing streak, its longest since June. The Dow Jones Industrial Average jumped 509 points, or 1%, and the Nasdaq composite rose 1%. The rebound was also driven by an update on US inflation data, which came in close to economists' expectations.

The latest inflation data showed that US 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 still high, this was close to what economists expected and what Wall Street was prepared for. The data strengthened expectations among traders that the Federal Reserve will hike its main interest rate at its meeting this week.

The rising expectations for an upcoming hike to rates drove up the yield of the two-year Treasury, which moves with guesses for upcoming Fed action, to 4.62% from 4.56% late Thursday. Longer-term Treasury yields held steadier, though.