US Equities Rallies as CPI Lands In Line and Oil Retreats Ahead of Fed Decision

Market Snapshot: Broad Gains Across Major Indexes

US equity benchmarks posted solid gains on Friday, September 11, 2026, with the S&P 500 gaining 0.86%, the Dow Jones Industrial Average climbing 0.98%, and the Nasdaq 100 adding 0.91% to the session. Front-month E-mini S&P futures (ESU26) edged up 0.83%, while September E-mini Nasdaq futures (NQU26) rose 0.86%.

The rally was underpinned primarily by a 2.4% drop in crude oil prices, which helped ease inflation concerns into the close. The broader market digested Friday's consumer price data with relative composure, even as the 10-year Treasury yield ticked higher and the market's pricing for a Federal Reserve rate increase at next week's FOMC meeting climbed to roughly 85%.

Inflation Data and the Fed Rate-Hike Question

The August US CPI report came in at +0.4% month-over-month, squarely in line with analyst forecasts. The core CPI figure, however, printed at +0.3% m/m, a touch hotter than the +0.2% m/m that consensus had called for. On a year-over-year basis, headline CPI held steady at +3.4%, unchanged from July and matching expectations. Core CPI on an annual basis eased slightly to +2.4% from July's +2.5%, marking a new 5.5-year low and landing in line with forecasts.

Despite the mixed signal, the data nudged the market higher on rate-hike probability. By Friday's close, traders were pricing an 88% chance of a 25-basis-point FOMC increase at the September 15-16 meeting, up from 75% on Thursday.

Consumer sentiment, by contrast, delivered a clear miss. The University of Michigan's preliminary September reading plunged 3.9 points to 47.8, far below the expected 0.6-point dip to 51.3. Inflation expectations also firmed: one-year-ahead expectations jumped to 4.6% from 4.0% in August (versus 4.2% expected), while five-to-ten-year expectations rose to 3.4% from 3.3%, edging above the 3.3% consensus.

Oil, Geopolitics, and US-Canada Trade Friction

October-dated WTI crude (CLV26) shed 2.4% on Friday, giving back part of Thursday's 6.7% surge that had pushed prices to a 3.5-month peak. Even so, the benchmark still accumulated a net 9% gain over the week. The Friday slide followed a warning from the International Energy Agency that elevated prices and constrained supply would trigger the steepest decline in global oil demand this year since the onset of the Covid-19 pandemic.

Geopolitical risks in the Middle East continued to loom. Two vessels were reportedly hit by unidentified projectiles near Oman on Thursday, with Iran widely suspected. Separately, Axios reported that Saudi Crown Prince Mohammed bin Salman placed two calls to President Trump on Thursday, urging a fresh military strike against the Houthi rebels in Yemen. The Houthis have been expanding their territorial control near the strategically vital Bab el-Mandeb Strait and have carried out attacks on Saudi oil infrastructure. Saudi Arabia also disclosed to OPEC that August crude output fell to 6.238 million barrels per day, the lowest level since 1990.

The US-Canada trade dispute remains a persistent headwind for equities. On Tuesday, Ottawa retaliated with tariffs ranging from 15% to 50% on hundreds of American goods, a response to Washington's earlier imposition of 50% tariffs on roughly $20 billion worth of Canadian imports. The US countermeasures included blocking imports of certain Canadian products, levying additional tariffs on others, and moving to exclude Canadian firms from selling to US government contractors.

Bond Markets and European Rate Outlook

In the US fixed-income market, December 10-year Treasury futures (ZNZ6) lost seven ticks during the session. The 10-year yield rose 0.6 basis points to 4.969%, extending Thursday's 11-bp jump that had pushed the benchmark to a 2.75-year high of 4.963%. Lower oil prices provided early support to bond prices, but the hawkish CPI print and the rising probability of a Fed hike ultimately kept yields elevated. A modest offset came from the 10-year breakeven inflation rate, which slipped 4.4 bp to 2.373%, down from Thursday's 3.25-month peak of 2.42%.

European sovereign yields painted a mixed picture. The 10-year German bund yield touched a fresh 24-year high of 3.532% intraday before settling 0.3 bp higher at 3.504%. The 10-year UK gilt briefly printed a 19-year high of 5.380% but finished the day down 3.1 bp at 5.343%.

Market participants are now assigning a 78% probability to a 25-bp rate hike by the European Central Bank at its October 29 meeting. At this week's gathering, the ECB raised its deposit facility rate by 25 bp to 2.50%, as widely anticipated, and signaled that inflation would remain above the 2% target for an "extended period."

Overseas equity markets closed in mixed fashion. The Euro Stoxx 50 gained 0.90%, while China's Shanghai Composite lost 1.18% and Japan's Nikkei-225 fell 1.91%.

Notable Stock Movers and Sector Highlights

Oracle (ORCL) had a volatile week. The stock jumped 5% in Thursday's overnight trade after the company announced cloud infrastructure revenue surged 121% to $7.4 billion, beating the $7.2 billion consensus. Oracle co-CEO Clay Magouyrk noted that the firm is "delivering data center and GPU capacity at a pace that would have seemed impossible only a year ago." The company also disclosed it had booked more than $30 billion in AI cloud contracts during the latest quarter, above expectations. Fiscal first-quarter revenue rose 30%, and adjusted EPS of $1.92 per share exceeded the $1.75 estimate. Despite the strong numbers, Oracle gave back its overnight pop and closed Friday down 1.7%.

Semiconductor shares rallied broadly, with the iShares Semiconductor ETF (SOXX) up 1.75%. ON Semiconductor (ON) surged over 8%, while Analog Devices (ADI), NXP Semiconductors (NXPI), Arm Holdings (ARM), and Marvell (MRVL) each gained more than 4%.

Among the Magnificent Seven, six of the group finished higher, with only Nvidia (NVDA) posting a modest decline. Amazon (AMZN), Alphabet (GOOGL), and Apple (AAPL) each rose more than 1%. Apple benefited from momentum following the release of its iPhone Duo earlier in the week, marking the company's first foray into foldable smartphones. Microsoft (MSFT) added 0.65% after disclosing plans to triple its computing capacity in a data-center expansion, citing a current shortage that has forced it to reject new AI and cloud workloads.

In crypto-adjacent equities, the sector traded higher, buoyed by a 3.1% gain in Ethereum and a 0.2% rise in Bitcoin. Mara Holdings (MARA) climbed over 4%, Riot Platforms added more than 2%, and Strategy (MSTR) and Coinbase (COIN) each gained over 1%.

Adobe (ADBE) edged up 1.4% despite guidance that slightly underwhelmed, stoking investor worries that AI-driven disruption could erode traditional software revenue streams. Dell Technologies (DELL) surged nearly 12% after RBC Capital Markets initiated coverage with an outperform rating and a $640 price target, citing robust demand for AI infrastructure.

Looking ahead, Liberty Live Holdings (LLYVK) is scheduled to report earnings on September 14, 2026.