U.S. stocks rebounded from four straight sessions of losses Friday as crude oil retreated from above $100 a barrel.
The relief arrived in spite of an August inflation report that pushed the market-implied odds of a Federal Reserve rate hike next week to roughly 90%.
Iranian state media said Tehran will sit down with Gulf states in Oman next week to discuss the Strait of Hormuz, and the headline was enough to knock the war premium out of crude.
West Texas Intermediate crude fell 3.0% to $99.36 a barrel, slipping back below the $100 mark it breached earlier this week. Even after Friday's decline, WTI is up 8.6% on the week and more than 19% over the past month.
Brent crude dropped 3.0% to $104.41 a barrel, trimming a weekly gain to 8.4%. AAA reported that U.S. diesel prices hit a record high at $6.05 a gallon on Friday.
Headline consumer prices rose 0.4% month-on-month in August, the most in three months, with a 3.9% surge in gasoline accounting for over a third of the increase and the annual rate holding at 3.4%.
Core CPI rose 0.3%, above the 0.2% consensus and the fastest since April, even as the annual core rate eased to a five-year low of 2.4%.
Following the release, the probability of a hike at the Sept. 15-16 meeting jumped from roughly 70% to around 90%.
Across U.S. equity markets by midday Friday, gains were broad-based but heavily concentrated in technology.
The S&P 500 rose 1.1% to 7,674, while the Dow Jones Industrial Average advanced 566 points, or 1.1%, to 52,630.
The Nasdaq 100 rose 1.1% to 29,433. The small-cap Russell 2000 lagged, adding 0.7% to 2,910.
Gold rose 1.3% to $4,374.67 an ounce, recovering part of this week's pullback. The CBOE Volatility Index sank 11.7% to 15.75.
Friday's Performance In Major US Indices
According to the market data platform:
- The Vanguard S&P 500 ETF (NYSE:VOO) gained 1.1%.
- The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) rose 1.1%.
- The Invesco QQQ Trust (NASDAQ:QQQ) climbed 1.2%.
- The iShares Russell 2000 ETF (NYSE:IWM) advanced 0.7%.
AI Rack Suppliers Rip As Oracle's $95 Billion Capex Bill Lands
The Technology Select Sector SPDR Fund (NYSE:XLK) led all sectors with a 1.7% advance, followed by the Communication Services Select Sector SPDR Fund (NYSE:XLC), up 1.3%, and the Industrials Select Sector SPDR Fund (NYSE:XLI), up 1.2%.
The Health Care Select Sector SPDR Fund (NYSE:XLV) was the only sector in the red, slipping 0.2%.
At the industry level, the VanEck Semiconductor ETF (NASDAQ:SMH) was the standout, rallying 2.0%.
The session's dominant corporate story came out on Thursday.
Oracle Corp. (NYSE:ORCL) posted fiscal first-quarter adjusted EPS of $1.92, up 30%, on revenue of $19.35 billion versus the $19.14 billion consensus, with cloud infrastructure revenue up 121% to $7.4 billion and remaining performance obligations swelling $209 billion year-over-year to $664 billion.
Management guided full-year capital expenditure to $90 billion to $95 billion. Shares traded flat, but the increase in CAPEX lifted the whole AI infrastructure theme.
Dell Technologies Inc. (NYSE:DELL) surged 11.3%, among the biggest gainers in the Russell 1000.
Hewlett Packard Enterprise Company (NYSE:HPE) jumped 9.1% on the same read-through, having posted record quarterly revenue of $12.2 billion, up 34% year-over-year, with $9.0 billion from Cloud & AI. Super Micro Computer Inc. (NASDAQ:SMCI) rose 6.1%.
Vicor Corporation (NASDAQ:VICR) was the single best performer in the large-cap index, up 11.8%.
Skyworks Solutions Inc. (NASDAQ:SWKS) climbed 8.0% in a second straight session of gains after CEO Phil Brace told a Goldman Sachs conference that the company's $22 billion merger with Qorvo Inc. (NASDAQ:QRVO) is in its final stages and should close by year-end.
The downside was dominated by nuclear. Oklo Inc. (NYSE:OKLO) tumbled 7.1% after entering an equity distribution agreement Friday to sell up to $1 billion of Class A common stock through 10 sales agents including Goldman Sachs, BofA Securities, Citigroup, J.P. Morgan and Morgan Stanley.
Chewy Inc. (NYSE:CHWY) slid 4.9% after JPMorgan downgraded the online pet retailer to Neutral from Overweight and cut its price target to $24 from $29, citing pressure on organic growth from macro headwinds and deteriorating discretionary and premiumization trends.
SailPoint Inc. (NASDAQ:SAIL) dropped 4.0%, extending the post-earnings drift that began Wednesday when second-quarter revenue of $308.8 million missed consensus despite an EPS beat and 25% annual recurring revenue growth to $1.23 billion.
AeroVironment Inc. (NASDAQ:AVAV) fell 3.6%, still unwinding from Wednesday evening's fiscal first-quarter report.
Elsewhere in earnings, The Kroger Co. (NYSE:KR) rose 2.1% after reporting EPS of $1.09 before the open, ahead of the $1.06 consensus. Adobe Inc. (NASDAQ:ADBE), which reported alongside Oracle after Thursday's close, was flat.
