[BRIEFING.COM] The major averages snapped a four-session losing streak on Friday, ending the holiday-shortened week with a broad rebound as lower oil prices and renewed strength in technology stocks outweighed increased expectations for a rate hike next week. The S&P 500 (+0.9%), Nasdaq Composite (+1.0%), and DJIA (+1.0%) held sizable gains through the close, while the Russell 2000 (+0.5%) and S&P Mid Cap 400 (+0.8%) also finished higher. Despite the rebound, the major averages still ended firmly lower for the week.

A pullback in crude oil offered some relief from one of the market's biggest headwinds of the past several sessions. WTI crude settled $2.31 lower (-2.3%) at $100.08 per barrel, trimming its advance for the week to roughly 10%. The retreat came amid reports that Gulf states will meet with Iran on Monday to discuss the Strait of Hormuz, providing some optimism for a potential de-escalation after crude surged above $102 per barrel on Thursday.

Perhaps more notable was the market's ability to rally despite an August CPI report that further strengthened expectations for tighter monetary policy. Total CPI increased 0.4% month-over-month, as expected, while core CPI rose a slightly hotter-than-expected 0.3% (Briefing.com consensus: 0.2%). The CME FedWatch Tool now assigns an 86.5% probability to a 25-basis-point rate hike at Wednesday's FOMC meeting, compared with 69.4% immediately before this morning's report.

Technology and other growth stocks supplied much of Friday's leadership. The communication services (+1.4%) and information technology (+1.1%) sectors were among the better performers as Alphabet (GOOG 335.45, +5.06, +1.53%) and Apple (AAPL 332.27, +5.70, +1.75%) moved higher, with the Vanguard Mega Cap Growth ETF advancing 0.9%.

Semiconductor stocks also bounced back from Thursday's sharp decline, lifting the PHLX Semiconductor Index 1.8%. Oracle (ORCL 150.15, -2.79, -1.82%) provided an important read-through for the AI infrastructure trade despite failing to hold its own early advance. Shares initially jumped by double digits following the company's quarterly report before giving back the gain, but 121% year-over-year cloud infrastructure revenue growth, more than $30 billion in new AI-cloud contracts, and maintained FY27 capital spending plans reinforced expectations for continued data center investment. That outlook fueled sizable gains in Dell (DELL 567.14, +60.52, +11.95%), Hewlett Packard Enterprise (HPE 62.08, +6.86, +12.42%), and other related names as investors anticipated sustained demand for servers, networking equipment, and storage.

The advance was not confined to the technology complex. The industrials (+1.1%) and consumer discretionary (+1.1%) sectors also finished among the outperformers, helping give the rebound a relatively broad foundation.

Defensive groups moved in the opposite direction, with the health care (-0.1%) and utilities (-0.3%) sectors finishing as the day's laggards.

Friday's rebound ultimately recovered a meaningful portion of the losses accumulated earlier in the week, but it was not enough to prevent a firmly lower weekly finish for the major averages. The session also showed that investors were willing to look through a less favorable rate outlook when some pressure from crude oil subsided and technology leadership reemerged. Attention now shifts squarely to Wednesday's FOMC decision, where the market is assigning an 86.5% probability to a 25-basis-point rate hike.

U.S. Treasuries had a mostly lower finish to a rough week that saw yields on all notes and bonds hit fresh highs for the year amid firming expectations for a rate hike next week. The 2-year note yield settled up nine basis points to 4.64% (+26 basis points this week), and the 10-year note yield settled up three basis points to 4.98% (+20 basis points this week). 

• Russell 2000: +17.0% YTD
• Nasdaq Composite: +13.3% YTD
• S&P Mid Cap 400: +12.4% YTD
• S&P 500: +11.9% YTD
• DJIA: +9.4% YTD

Reviewing today's data:

• August CPI 0.4% (Briefing.com consensus 0.4%); Prior 0.1%, August Core CPI 0.3% (Briefing.com consensus 0.2%); Prior 0.2%
  • The key takeaway from the report is that it wasn't good enough to put September rate-hike fears to rest.
• September Univ. of Michigan Consumer Sentiment - Prelim 47.8 (Briefing.com consensus 51.5); Prior 51.7
  • The key takeaway from the report is the dour outlook embedded in the index of consumer expectations, which was plagued by a worsening outlook for personal finances and business conditions.
• The U.S. Treasury reported a $166.8 bln deficit for August (Briefing.com consensus -$485.0 bln). The Treasury Budget data is not seasonally adjusted so the August deficit cannot be compared to the July deficit of $432.3 bln. The deficit a year ago was $344.8 bln.
  • The key takeaway is that the August deficit looked much better on the surface, but the underlying fiscal picture remains largely unchanged. The August deficit was down 52% yr/yr, but calendar shifts and lower tariff-refund outlays explain much of the improvement, while the fiscal YTD deficit remains near a record $1.97 trln and interest costs are up 13% yr/yr.

[BRIEFING.COM] Stocks have spent the afternoon in a tight trading range as the major averages look to secure their only positive finish of the holiday-shortened week.

Next week's action will be driven by Wednesday's FOMC decision, with the CME FedWatch Tool now assigning an 86.5% probability to a 25-basis-point rate hike in the wake of this morning's CPI release.

[BRIEFING.COM] The S&P 500 (+1.0%), Nasdaq Composite (+1.1%), and DJIA (+1.0%) remain little changed from previous levels as the market enters the final hour of the session.

Crude oil futures settled today's session $2.31 lower (-2.3%) at $100.08 barrel, helping fuel the broad rebound today despite crude reclaiming the $100 per barrel mark. On a week-to-date basis, crude is up around 10%, and the energy sector (+1.9% week-to-date) is on pace to capture the widest week-to-date gain.

[BRIEFING.COM] The S&P 500 (+0.99%) is up 75 points this afternoon, narrowly in last place among the major averages.

The Treasury Budget for August showed a deficit of $166.8 billion compared to a deficit of $344.8 billion in the same period a year ago.

The August deficit resulted from outlays ($526.8 billion) exceeding receipts ($360.0 billion). The Treasury Budget data are not seasonally adjusted so the August deficit cannot be compared to the July deficit of $432.3 bln.

The key takeaway is that the August deficit looked much better on the surface, but the underlying fiscal picture remains largely unchanged. The August deficit was down 52% yr/yr, but calendar shifts and lower tariff-refund outlays explain much of the improvement, while the fiscal YTD deficit remains near a record $1.97 trln and interest costs are up 13% yr/yr.

[BRIEFING.COM] The Nasdaq Composite (+1.19%) is in first place on Friday afternoon, up north of 310 points.

Gold futures settled $1.60 higher (+0.0%) at $4,408.90/oz, down then -1.51% on the week, as dip-buying and lower Treasury yields provided support. Gains were limited by expectations for a September Fed rate hike, while easing oil prices helped temper inflation and yield concerns.

Meanwhile, the U.S. Dollar Index is up less than +0.1% to $99.09.

[BRIEFING.COM] The Dow Jones Industrial Average (+1.15%) is in second place on Friday afternoon, up about 600 points.

A look inside the DJIA shows that Cisco (CSCO 111.52, +4.08, +3.80%), Boeing (BA 211.35, +6.55, +3.20%), and IBM (IBM 240.00, +5.98, +2.56%) are among today's top gain getters.

Meanwhile, UnitedHealth (UNH 378.77, -9.51, -2.45%) is firmly lower.

The DJIA is poised to end the week down -1.41%.

Also, at the top of the hour, Baker Hughes (BKR 57.56, -1.83, -3.09%) announced a weekly U.S. rotary rig count of 591, +3 w/w and +52 yr/yr.

[BRIEFING.COM] Stocks are staging a broad rebound on Friday, reclaiming a sizable portion of this week's losses despite an August CPI report that strengthened expectations for a rate hike at next week's FOMC meeting. The S&P 500 (+1.0%), Nasdaq Composite (+1.1%), and DJIA (+1.1%) remain firmly higher just after midday, although all three major averages are still on track for a lower finish for the holiday-abbreviated week.

The market's ability to look past the inflation report has been notable. Total CPI increased 0.4% month-over-month in August, as expected, while core CPI rose 0.3% (Briefing.com consensus: 0.2%). The report pushed the implied probability of a 25-basis-point rate hike sharply higher, with the CME FedWatch Tool currently assigning an 86.5% probability to a move next week. That is below the immediate post-report reading of 90.4%, but well above the 69.4% probability seen before the release.

Instead, some relief from this week's surge in crude oil has helped stocks overcome the more hawkish rate outlook. WTI crude is down nearly 3% and has slipped back below $100 per barrel amid reports that Gulf states will meet with Iran on Monday to discuss the Strait of Hormuz. The pullback has provided some breathing room after oil climbed above $102 per barrel yesterday and served as a persistent headwind during the market's recent losing streak.

The rebound is broad, although growth stocks are providing some of the strongest leadership. The communication services (+1.7%) and information technology (+1.2%) sectors sit near the top of the standings, while the Vanguard Mega Cap Growth ETF is up 1.1%. Semiconductor stocks are also participating, with the PHLX Semiconductor Index up 2.1%.

Oracle's (ORCL 151.70, -1.24, -0.81%) earnings results have provided an additional boost to the AI infrastructure trade. The stock initially jumped by double digits following its report before surrendering the advance, but the company's 121% year-over-year growth in cloud infrastructure revenue, more than $30 billion of new AI-cloud contracts, and maintained FY27 capital spending plans have provided a favorable read-through for hardware suppliers. Dell (DELL 558.15, +51.53, +10.17%), Hewlett Packard Enterprise (HPE 60.87, +5.64, +10.22%), Super Micro Computer (SMCI 38.98, +1.60, +4.28%), and NetApp (NTAP 195.02, +11.42, +6.22%)are all posting sizable gains as investors anticipate continued spending on servers, networking equipment, and storage to support the data center buildout.

Strength extends beyond the technology complex, with the industrials (+1.2%) and consumer discretionary (+1.1%) sectors among the other outperformers.

Defensive areas are notably trailing the rebound, as the health care sector is flat and the utilities sector (+0.1%) holds only a modest gain.

Overall, Friday's advance has recaptured a meaningful portion of the week's decline even as the CPI report strengthened the case for a rate hike next week. Lower oil prices and renewed leadership from technology and mega-cap stocks have so far outweighed those policy concerns, allowing the major averages to mount their strongest rebound of an otherwise difficult week.

Reviewing today's data:

• August CPI 0.4% (Briefing.com consensus 0.4%); Prior 0.1%, August Core CPI 0.3% (Briefing.com consensus 0.2%); Prior 0.2%
  • The key takeaway from the report is that it wasn't good enough to put September rate-hike fears to rest.
• September Univ. of Michigan Consumer Sentiment - Prelim 47.8 (Briefing.com consensus 51.5); Prior 51.7
  • The key takeaway from the report is the dour outlook embedded in the index of consumer expectations, which was plagued by a worsening outlook for personal finances and business conditions.

[BRIEFING.COM] The major averages continue to move in a relatively tight range firmly above their baselines just after midday.

Kroger (KR 58.30, +1.35, +2.37%) is nicely higher today after reporting its Q2 (Jul) results this morning. The company's results were softer on the comp side, but overall encouraging. Traffic remained positive, though consumers continued to spend cautiously, with smaller baskets and slower unit growth, reinforcing the importance of value and helping support continued strength in private brands. More encouragingly, KR is protecting profitability despite the softer sales environment, with cost savings across sourcing, procurement and productivity helping offset pressure on the top line. Management expects those savings to build through the second half, while improving eCommerce profitability and continued Retail Media growth provide additional support to margins. Overall, KR appears to be balancing a cautious consumer backdrop with disciplined cost management while continuing to invest in value.

Meanwhile, Adobe (ADBE 250.63, +1.80, +0.72%) is modestly higher after reporting earnings, shaking off a sharp premarket loss. The report sharpened the divide between Adobe's rapidly expanding AI usage and the slower financial conversion of that engagement. Firefly, Acrobat AI Assistant and enterprise AI products are gaining traction, but declining net new ARR and single-digit RPO growth leave investors without clear evidence that these offerings are accelerating ADBE's overall growth rate. The Q4 setup depends on seasonal enterprise closings, continued AI conversion and new product releases offsetting the deliberate freemium and deferred-pricing headwinds.

[BRIEFING.COM] The major averages remain near session highs at midday.

Dell (DELL 563.12, +56.50, +11.15%), Hewlett Packard Enterprise (HPE 60.24, +5.01, +9.07%), Super Micro Computer (SMCI 39.64, +2.26, +6.05%), and NetApp (NTAP 195.23, +11.63, +6.33%) are rallying sharply following Oracle's (ORCL 153.00, +0.05, +0.04%) results, which reinforced expectations for continued strength in AI infrastructure spending. ORCL reported 121% year-over-year growth in cloud infrastructure revenue and more than $30 billion in new AI-cloud contracts, while maintaining its roughly $90-$95 billion FY27 capex target. The results are providing a boost to server, networking, and storage names that stand to benefit from the continued data center buildout.

[BRIEFING.COM] Stocks are having their best session of an otherwise negative week, with the S&P 500 (+1.1%), Nasdaq Composite (+1.3%), and DJIA (+1.0%) near session highs just before midday.

After continuous upward pressure this week, oil prices have pulled back today, providing the market with some much-needed relief after WTI crossed the $102 per barrel mark. Reports that Gulf states will meet with Iran Monday to discuss the Strait of Hormuz have so far outweighed headlines of record diesel prices, and WTI crude is currently down $3.30 (-3.2%) to $99.18 per barrel.

Strength is broad with nine S&P 500 sectors trading higher, and the defensive health care (-0.3%) and utilities (-0.1%) just recently moving into slightly negative territory.

Meanwhile, the communication services (+1.9%) and information technology (+1.6%) sectors hold the widest gains, supported by strength in mega-cap stocks such as Alphabet (GOOG 338.81, +8.42, +2.55%) and Apple (AAPL 334.97, +8.40, +2.57%) . The Vanguard Mega Cap Growth ETF is up 1.3%.

[BRIEFING.COM] The major averages remain firmly higher, sitting just a touch below their best levels of the session. 

Oracle (ORCL 153.08, +0.14, +0.09%) has given back its early gain after beating expectations on the top and bottom lines and reporting accelerating cloud growth in its Q1 (Aug) report last night. This was a solid report from Oracle, highlighted by accelerating cloud growth and management's expectation for Cloud Infrastructure growth to continue accelerating throughout FY27. The continued increase in RPO points to a healthy demand environment, while the sharp acceleration in Cloud Infrastructure growth provides further evidence that Oracle is converting its massive backlog into revenue. GPU utilization also remained very high at 97.9%, while capacity coming up for renewal was renewed or resold at roughly a 20% premium despite the majority of those GPUs being four years or older, supporting the economics of Oracle's AI infrastructure buildout. With shares down more than 20% YTD heading into the report, the accelerating growth and visible progress against its backlog offer some relief. Margin pressure and free cash flow remain the main watch items as Oracle continues its heavy infrastructure buildout, though customer prepayments and alternative funding structures help offset the cash burden, while operating margins have remained resilient.

The iShares GS Software ETF (IGV 101.25, +0.05, +0.05%) initially surged higher, but has since retreated to its flat line as well, though strength across semiconductor names keeps the information technology sector (+1.3%) firmly higher. 

[BRIEFING.COM] The S&P 500 (+1.1%), Nasdaq Composite (+1.2%), and DJIA (+0.9%) are holding on to their solid opening gains, with broad strength and tech leadership providing the foundation for the index level advance.

The preliminary reading for the University of Michigan Consumer Sentiment Index for September sunk to 47.8 (Briefing.com consensus: 51.5) from 51.7 in August. In the same period a year ago, the index stood at 55.1.

The key takeaway from the report is the dour outlook embedded in the index of consumer expectations, which was plagued by a worsening outlook for personal finances and business conditions.

[BRIEFING.COM] The S&P 500 (+1.0%), Nasdaq Composite (+1.2%), and DJIA (+1.1%) have reclaimed a chunk of this week's losses as stocks opened to broad strength.

Despite this morning's release of the August Consumer Price Index nearly locking in the market's expectations for a rate hike at next week's FOMC meeting, stocks are enjoying a nice boost from easing oil prices. Crude oil is currently down $3.39 (-3.3%) to $99.09 per barrel amid reports of more potential negotiations between Gulf states on Monday around the Strait of Hormuz.

All eleven S&P 500 sectors trade higher, with solid leadership from mega-cap and tech stocks. The information technology sector (+1.6%) holds the widest gain, boosted by a 1.6% gain in the PHLX Semiconductor Index and strength in Oracle (ORCL 156.57, +3.63, +2.37%) after earnings.

Just released, the preliminary University of Michigan Consumer Sentiment Index for September decreased to 47.8 (Briefing.com consensus: 51.5) from the final August reading of 51.7.

Equity futures continue to point to a higher open amid the pullback in oil prices, despite the August CPI report significantly increcasing the market's expectations for a rate hike next week. 

Total CPI was up 0.4% month-over-month in August, as expected, while core CPI, which excludes food and energy, was up 0.3% (Briefing.com consensus: 0.2%). With these changes, the year-over-year increase in total CPI was 3.4%, as expected, unchanged from July, and core CPI was up 2.4%, down from 2.5% in July.

The key takeaway from the report is that it wasn't good enough to put September rate-hike fears to rest. Before the CPI report was released, there was a 69.4% probability of a 25-basis-point rate hike next week, according to the CME FedWatch Tool. Following the report, that probability sits at 90.4%.

The stock market remains on track for a higher open, with the S&P 500 futures currently trading 80 points above fair value. 

Equity indices in the Asia-Pacific region ended the week on a lower note. China released a five-year plan for developing intelligent connected new energy vehicles. South China Morning Post reported that foreign automakers are slashing prices of gas-powered vehicles in China. There was some speculation that the Bank of Japan could accelerate the pace of its rate hikes. South Korea's exports for the first ten days of September were up 82.6% with chip exports soaring 270.1%.

• In economic data:
  • South Korea's exports during the first ten days of September increased 82.6%, with chip exports up 270.1%.
  • Japan's August PPI decreased 0.2% month-over-month (expected 0.0%; last 0.4%) and increased 7.6% year-over-year (expected 7.4%; last 7.7%).
  • Japan's Q3 BSI Large Manufacturing Conditions index rose to 7.6 (expected 2.5; last -1.8).
  • New Zealand's August Business PMI fell to 53.1 from 54.3.

---Equity Markets---

• Japan's Nikkei: -1.9%
• Hong Kong's Hang Seng: -0.6%
• China's Shanghai Composite: -1.2%
• India's Sensex: -0.2%
• South Korea's Kospi: -1.8%
• Australia's ASX All Ordinaries: -1.0%

Major European indices are looking for a higher finish to the week with help from a pullback in the price of oil. Several European Central Bank policymakers commented about inflation remaining too high, prompting speculation about another rate hike in October. France's finance ministry lowered its domestic growth forecast for the year to 0.5% from 0.7%. Towns in England led by mayors from the Labour party are reportedly planning a 5% tourist tax.

• In economic data:
  • U.K. July GDP increased 0.4% month-over-month (expected 0.0%; last 0.3%) and 1.6% year-over-year (expected 1.2%; last 1.1%).
  • The U.K.'s July trade deficit narrowed to GBP20.97 billion (expected deficit of GBP22.60 billion; last deficit of GBP23.01 billion).
  • U.K. July industrial production increased 0.2% month-over-month (expected -0.2%; last -0.2%) and 0.6% year-over-year (expected 0.2%; last -0.2%).
  • U.K. July manufacturing production increased 0.9% month-over-month (expected 0.2%; last -0.5%) and 2.6% year-over-year (expected 2.0%; last 0.5%).
  • U.K. July construction output increased 0.1% month-over-month, as expected (last 0.1%), and decreased 2.5% year-over-year (expected -2.3%; last -2.3%).
  • Italy's Q2 unemployment rate increased to 5.6% (expected 5.4%; last 5.3%).
  • Switzerland's August SECO Consumer Climate index was unchanged at -33, as expected.

---Equity Markets---

• STOXX Europe 600: +1.0%
• Germany's DAX: +0.6%
• U.K.'s FTSE 100: +1.0%
• France's CAC 40: +1.1%
• Italy's FTSE MIB: +1.3%
• Spain's IBEX 35: +1.1%

The S&P 500 futures currently trade 37 points above fair value in the immediate response to the August Consumer Price Index.

Total CPI was up 0.4% month-over-month in July (Briefing.com consensus: 0.4%) following a 0.1% increase in July. That left the year-over-year rate at 3.4%, unchanged from July.

Core CPI, which excludes food and energy, was up 0.3% month-over-month (Briefing.com consensus: 0.2%) following a 0.2% increase in July. On a year-over-year basis, core CPI was up 2.4% versus 2.5% in July.

Equity futures point to a higher open this morning, enthused by a pullback in oil prices as investors await the release of the August Consumer Price Index.

Stocks have finished lower in the first three sessions of the week as oil prices have surged, with WTI crude moving above $102 per barrel yesterday. Oil is currently down $3.24 (-3.2%) to $99.24 per barrel following a Financial Times report that neighboring Gulf states will meet with Iran on Monday in an attempt to ease hostilities around the Strait of Hormuz.

While the market will continue to monitor geopolitical developments, investors will be closely attuned to the 8:30 a.m. ET release of the August Consumer Price Index (Briefing.com 0.4%), which many view as the deciding factor for the Fed's next move at the September 16 FOMC meeting. Following a relatively in-line Producer Price Index yesterday, the CME FedWatch tool currently assigns a 69.4% probability to a 25-basis point rate hike.

Today's remaining economic calendar:

• 8:30 AM ET: August CPI; Briefing.com consensus 0.4%; prior 0.1%
• 8:30 AM ET: August Core CPI; Briefing.com consensus 0.2%; prior 0.2%
• 10:00 AM ET: September Univ. of Michigan Consumer Sentiment - Prelim; Briefing.com consensus 51.5; prior 51.7
• 2:00 PM ET: August Treasury Budget; Briefing.com consensus -$485.0B; prior -$432.3B

In corporate news:

• Adobe (ADBE) is down sharply in pre-market trading after a modest Q3 beat and in-line Q4 guidance failed to resolve concerns about converting rapid AI engagement into paid recurring revenue.
• Oracle (ORCL 162.01, +8.84, +5.77%) beat quarterly earnings and revenue estimates as total cloud revenue increased 62%, and its fiscal 2027 earnings outlook was above consensus.
• Copart (CPRT 32.55, +1.80, +5.85%) missed the earnings estimate while reporting in-line revenue and agreed to acquire ACV Auctions (ACVA 10.43, +3.21, +44.46%) for cash.
• Microsoft (MSFT 495.48, +2.92, +0.6%) is planning to triple data center capacity by 2032, according to Bloomberg.

Reviewing overnight developments:

Equity markets ended the week on a lower note amid speculation that the Bank of Japan could accelerate its rate-hike pace. Japan's Nikkei: -1.9%, Hong Kong's Hang Seng: -0.6%, China's Shanghai Composite: -1.2%, India's Sensex: -0.2%, South Korea's Kospi: -1.8%, Australia's ASX All Ordinaries: -1.0%.

In news:

• China released a five-year plan for developing intelligent connected new energy vehicles.
• Foreign automakers are reportedly cutting prices on gas-powered vehicles in China.
• South Korea's exports during the first ten days of September increased 82.6%, with chip exports up 270.1%.

In economic data:

• Japan's August PPI -0.2% m/m (expected 0.0%; last 0.4%); 7.6% yr/yr (expected 7.4%; last 7.7%). Q3 BSI Large Manufacturing Conditions 7.6 (expected 2.5; last -1.8)
• New Zealand's August Business PMI 53.1 (last 54.3)

A pullback in oil has provided support, while comments about persistent inflation from European Central Bank policymakers have prompted speculation about another rate hike in October. STOXX Europe 600: +0.6%, Germany's DAX: +0.5%, U.K.'s FTSE 100: +0.6%, France's CAC 40: +0.6%, Italy's FTSE MIB: +0.7%, Spain's IBEX 35: +0.6%.

In news:

• France's finance ministry lowered its 2026 growth forecast to 0.5% from 0.7%.
• Labour-led towns in England are reportedly planning a 5% tourist tax.

In economic data:

• U.K.'s July GDP 0.4% m/m (expected 0.0%: last 0.3%); 1.6% yr/yr (expected 1.2%; last 1.1%). July trade deficit GBP20.97 bln (expected deficit of GBP22.60 bln; last deficit of GBP23.01 bln). July Industrial Production 0.2% m/m (expected -0.2%; last -0.2%); 0.6% yr/yr (expected 0.2%; last -0.2%). July Manufacturing Production 0.9% m/m (expected 0.2%; last -0.5%); 2.6% yr/yr (expected 2.0%; last 0.5%). July Construction Output 0.1% m/m, as expected (last 0.1%); -2.5% yr/yr (expected -2.3%; last -2.3%)
• Italy's Q2 Unemployment Rate 5.6% (expected 5.4%; last 5.3%) Swiss August SECO Consumer Climate -33, as expected (last -33)

[BRIEFING.COM] The major averages extended their losing streak to three sessions on Thursday as another surge in crude oil, rising Treasury yields, and heightened expectations for a rate hike continued to weigh on equities. The S&P 500 (-0.6%), Nasdaq Composite (-0.7%), and DJIA (-0.6%) finished with similar losses, while the Russell 2000 (-1.0%) and S&P Mid Cap 400 (-0.9%) underperformed.

Oil prices remained at the center of the market's concerns and continued climbing throughout the afternoon as an off-ramp to the U.S.-Iran conflict remained elusive. WTI crude settled $6.32 higher (+6.6%) at $102.30 per barrel, bringing its gain for the holiday-abbreviated week to roughly 11.5%. The latest advance compounded the oil-driven pressure that has weighed on equities throughout the week. Treasury yields presented another obstacle, with the 10-year note yield climbing 11 basis points to 4.94%.

Expectations for tighter monetary policy also increased following this morning's August Producer Price Index. Headline PPI rose 0.4% month-over-month, matching the Briefing.com consensus, while core PPI increased a slightly cooler-than-expected 0.2% (Briefing.com consensus: 0.3%). However, upward revisions to the July readings and an acceleration in year-over-year producer inflation reinforced expectations for a possible rate hike at next week's FOMC meeting. The CME FedWatch Tool assigned a 73.1% probability to a rate hike following the report, up from 61.2% yesterday.

The pressure remained widespread through the close, with nine of the 11 S&P 500 sectors finishing lower. The materials sector (-1.5%) ended at the bottom of the standings amid declining precious metal prices with particular weakness in copper.

Meanwhile weakness in the information technology sector (-0.9%) had an outsized influence on the major averages. Semiconductor stocks were a particular source of weakness after providing relative support during the first two sessions of the week. The PHLX Semiconductor Index dropped 2.7%, with NVIDIA (NVDA 218.40, -5.27, -2.36%) among the notable mega-cap laggards. Taiwan Semiconductor Manufacturing (TSM 428.31, -7.05, -1.62%) also declined despite reporting a 53.3% year-over-year increase in August revenue to NT$514.81 billion, as the stock gave back some ground following its strong recent run.

Skyworks (SWKS 84.03, +7.49, +9.79%) and Qorvo (QRVO 112.36, +7.12, +6.77%) bucked the broader semiconductor weakness, however, as shares rallied amid increased investor optimism that their proposed merger will ultimately close.

Earnings-related selling added to the weakness in several individual names. Cooper (COO 54.17, -9.31, -14.67%) fell sharply after its Q3 revenue miss and downside Q4 guidance highlighted a steeper near-term slowdown at CooperVision. American Eagle (AEO 14.54, -2.35, -13.91%) was another pronounced laggard following its quarterly results, as continued softness at the American Eagle brand and a modest reduction to back-half operating income expectations overshadowed strength at Aerie. Several other apparel stocks traded lower in sympathy.

There were some pockets of strength outside the technology sector. Reddit (RDDT 155.36, +8.92, +6.09%) ranked among the better-performing S&P 500 components, while Comcast (CMCSA 25.17, +0.58, +2.36%) and CHTR rebounded from Wednesday's declines. Both stocks had come under pressure in the prior session after Comcast highlighted heightened "competitive intensity" during comments at the Goldman Sachs Communacopia + Technology Conference. The communication services sector finished 0.3% higher, while the consumer staples sector (+0.2%) also finished modestly higher.

Attention now turns to a pair of potentially significant catalysts. Oracle (ORCL 153.17, -8.46, -5.23%) reports earnings after today's close and faces elevated expectations surrounding its rapidly expanding AI infrastructure business and massive data center buildout. Investors will be looking for continued cloud acceleration as new capacity comes online, along with evidence that the company's heavy infrastructure investment is progressing as planned.

Tomorrow morning's August CPI report (Briefing.com consensus: 0.4%) carries even broader implications. The report is widely viewed as a key deciding factor in whether the Fed raises rates or remains on hold at next week's FOMC meeting, putting inflation and the policy outlook squarely in focus following three consecutive losing sessions for the stock market.

Selling in U.S. Treasuries on Thursday produced yet another round of fresh 2026 highs in yields on notes and bonds of all tenors.  Today's strong 30-year bond reopening briefly returned the 30-year yield to its opening level before late pressure lifted that yield to within five basis points of its high from 2007 (5.408%). The 2-year note yield settled up 12 basis points to 4.55%, and the 10-year note yield settled up 11 basis point to 4.94%.

• Russell 2000: +16.5% YTD
• Nasdaq Composite: +12.2% YTD
• S&P Mid Cap 400: +11.5% YTD
• S&P 500: +10.9% YTD
• DJIA: +8.3% YTD

Reviewing today's data: 

• August PPI 0.4% (Briefing.com consensus 0.4%); Prior was revised to 0.1% from 0.0%, August Core PPI 0.2% (Briefing.com consensus 0.3%); Prior was revised to 0.3% from 0.2%
  • The key takeaway from the report is that while the slightly cooler-than-expected core PPI was a positive sight, it was essentially masked by the upward revisions to readings for July, so this report reinforces the market's expectations for a rate hike as early as next week.
• Weekly Initial Claims 206K (Briefing.com consensus 208K); Prior was revised to 207K from 206K, Weekly Continuing Claims 1.774 mln; Prior was revised to 1.775 mln from 1.779 mln
  • The key takeaway from the report is that initial claims remain locked in a narrow range right on their four-week moving average, signaling little overall change in layoff activity.
• August Existing Home Sales 3.98 mln (Briefing.com consensus 4.03 mln); Prior 4.06 mln
  • The key takeaway from the report is that home sales remain pressured by high mortgage rates and limited inventory, especially at the lower end. Sales of homes priced at $500,000 and below have faced the most pressure while sales of homes priced over $1 million have were up 3.9% year-over-year in August.
• July Wholesale Inventories 1.3% (Briefing.com consensus 1.3%); Prior was revised to 0.4% from 0.2%