US Stocks Rebound on Oil Price Drop and Inflation Data
US stocks experienced a rebound on Friday after oil prices dropped and inflation data came in line with expectations. The S&P 500 rose 0.9%, snapping a four-day losing streak, while the Dow Jones Industrial Average jumped 1% and the Nasdaq composite climbed 1%. A report showed that US consumers paid 3.4% more for gasoline, food, and other living costs last month compared to the same period in 2022.
While inflation remains high, the data was close to what economists had predicted, easing concerns about the economy. The Federal Reserve is expected to raise interest rates at its meeting next week to combat inflation. This move would increase borrowing costs and slow down economic growth, helping to bring prices under control.
The rising expectations for a rate hike drove up the two-year Treasury yield to 4.62% from 4.56% on Thursday. However, longer-term Treasury yields remained steady, indicating that investors believe upcoming hikes will help manage inflation over the long term.