US Stocks Rise Amid Oil Slide, Fed Rate Hike Bets

By EC Assets · Published

U.S. stock futures advanced as oil prices decreased ahead of key inflation data. This movement occurred despite increased expectations for a Federal Reserve interest rate hike. Brent crude and West Texas Intermediate’s front-month contracts declined following reports of diplomatic talks between Gulf states. The U.S. oil prices fell for the first time in two weeks. This provided relief to stock investors. Traders are adding to Federal Reserve interest rate hike bets after accelerating U.S. inflation. Bond yields are near multi-year peaks. The Federal Reserve is seen likely to raise rates next week after the inflation report. Inflation persisted in August. This development could lock in a Federal Reserve interest rate hike. An analysis suggests that hot Consumer Price Index (CPI) data puts a Federal Reserve figure's credibility on the line before a rate decision. Gold prices were broadly stable on Monday. Investors balanced rising geopolitical tensions between the United States and Iran against expectations that higher energy prices could encourage the Federal Reserve to raise rates. The Canadian dollar strengthened against its U.S. counterpart on Tuesday. A sharp rise in oil prices supported this, as escalating Middle East tensions raised concerns about disruptions to global energy supplies. In contrast, an index tracking emerging-market currencies rose on Wednesday. This happened as the dollar weakened after softer-than-expected U.S. producer prices drove traders to scale back wagers on Federal Reserve interest-rate increases. Key inflation data, specifically the CPI, is a major focus for markets. The Federal Reserve's rate decision next week will be closely watched. Upcoming diplomatic talks among Gulf states concerning oil supply could also influence commodity prices. This article is intended for informational purposes only. It does not constitute investment advice.

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