Traders work at the New York Stock Exchange (NYSE) in New York City, USA, August 24, 2026.Brendan McDermid | Reuters Stocks rose on Friday, with investors looking to rebound from four straight days of declines, as oil prices retreated. Traders also overlooked rising expectations for a Federal Reserve rate hike following the latest U.S. inflation reading. The Dow Jones Industrial Average traded 500 points higher, or 1%. The S&P 500 rose 0.9% and the Nasdaq Composite rose 1%. The major averages have fallen for four consecutive sessions. For the Dow, it was the longest daily losing streak since late April. Crude oil prices fell, giving up some of the strong gains seen this week due to escalating tensions in the Middle East. West Texas Intermediate futures fell 3% to $99.28 a barrel. Brent futures also fell 3.1% to $104.32 per barrel. Even so, both contracts maintained the pace of weekly advances of around 8%. On top of that, the latest US inflation data shows that higher energy prices are putting upward pressure on consumer goods. The CPI rose 0.4% in August month over month and 3.4% year over year, matching Dow Jones estimates. The core CPI, which excludes energy and food, rose 0.3% from the previous month, slightly more than expected. Yields were broadly stable after the report, although the 2-year Treasury yield hit its highest level since July 2024, reflecting growing expectations for a rate hike from the Federal Reserve. The CME Group’s FedWatch tool shows an 85.6% probability of a quarter-point rate hike next week. “The debate has quickly moved from whether the Fed will raise rates to the more important question of how many hikes this cycle will ultimately require,” Seema Shah, chief global strategist at Principal Asset Management, said. “We don’t expect the Fed to be a one-size-fits-all. It’s no longer about simply tightening the economy. After half a decade of above-target inflation, policymakers are likely to conclude that more than one increase will be necessary to restore price stability.” A strong earnings report from cloud computing company Oracle added confidence to the AI thesis this week.
