The Money Edit

Opening bell

Opening bell

S&P futures 0.6%
Core CPI 0.3% in August
Fed hike odds 70% for next week
Brent crude 3.6% to $103.70
Nikkei 225 1.9% to 64,011
10 year Treasury yield 4.94%

Core inflation runs hot, Fed hike odds hit 70%

Overnight

US stocks fell for a fourth straight day on Thursday, with the S&P 500 down 0.63% to 7,588.31, the Dow down 0.76% to 51,981.28 and the Nasdaq Composite down 0.65% to 26,083.67, as oil pushed above $100 a barrel and the 10 year Treasury yield hit 4.91%, its highest since 2023. Asia followed lower overnight, with Japan's Nikkei 225 closing down 1.93% at 64,011.34 on the same oil and rates worries. Europe steadied this morning, the STOXX 600 up 0.4% at 638.63 though still heading for its biggest weekly drop in about two months, while oil retreated with Brent down 3.61% to $103.70 and US futures pointed higher, S&P 500 futures up 0.56%.

What to watch

The August consumer price index landed at 8:30am and showed prices up 0.4% on the month and 3.4% over the year, both as expected, but core inflation, which strips out food and energy to show the underlying trend, rose 0.3% against a 0.2% forecast. That hotter core reading pushed traders to price about a 70% chance the Federal Reserve raises interest rates at its September 16 meeting, and the two year Treasury yield, the part of the bond market that moves most on Fed expectations, jumped around 15 basis points to a more than two year high. The University of Michigan consumer sentiment survey follows at 10:00am, expected at 51.0, a monthly gauge of how households feel about their own finances and the wider economy.

Sources