Dow Snaps 4-Day Slide With 509-Point Rally as Oil Cools

Stocks rebounded Friday as crude retreated below $100, letting traders look past a hot core CPI print and near-certain Fed rate hike odds.

Stocks rallied Friday, ending a four-day losing streak for the major averages — the Dow's longest daily slide since late April. CNBC reports the Dow Jones Industrial Average advanced 509.19 points, or 0.98%, to close at 52,573.29, while the S&P 500 climbed 0.86% to 7,656.98 and the Nasdaq Composite rose 0.96% to 26,333.04. The rebound came as oil prices pulled back from this week's spike and investors chose to look past the latest inflation reading. Breadth confirmed the turn: according to CNBC, NYSE advancers outnumbered decliners roughly 2-to-1, with 1,701 names higher against 924 lower, and ten of eleven S&P sectors finished in the green.

Crude's pullback was the pivotal swing. CNBC reports West Texas Intermediate futures dropped 2.4% to settle at $100.05 per barrel and Brent slid 2.8% to $104.61, after WTI had crossed above $100 on Thursday for the first time since May 19. Investor's Business Daily likewise noted oil falling back below the $100 mark Friday. The cooling followed news that Saudi Arabia shut its crucial East-West crude pipeline as a precaution after attacks in the Riyadh and Madinah regions, and that Iran plans to meet Gulf states in Oman Monday to discuss the Strait of Hormuz. Even so, WTI still rallied nearly 10% this week and Brent about 9%, keeping energy pressure on the inflation outlook.

The rally defied a largely hot inflation report. The consumer price index rose 0.4% in August month over month and 3.4% year over year, matching estimates, but CNBC reports core CPI climbed 0.3% monthly, slightly above expectations. Treasury yields were mostly steady, though CNBC notes the 2-year yield topped 4.6% — its highest since July 2024 — and CME Group's FedWatch tool showed roughly an 86% chance of a quarter-point hike next week. Seema Shah, chief global strategist at Principal Asset Management, told CNBC the debate has shifted to how many hikes this cycle will require, adding, 'We do not expect the Fed to be one-and-done.' Meanwhile, University of Michigan consumer sentiment fell to 47.8 from 51.7, with year-ahead inflation expectations rising to 4.6%, per CNBC.

AI-infrastructure names powered the tech rebound. CNBC reports Hewlett Packard Enterprise and Dell Technologies each gained nearly 11%, with Dell boosted by an RBC outperform initiation calling it a primary beneficiary of AI infrastructure spending, while Cisco rose 4.1% as the Dow's top percentage gainer. Skyworks Solutions jumped more than 8% on expectations its Qorvo acquisition closes by year-end, but Seagate fell 3.4% as the S&P's worst performer. CNBC also noted Oracle's post-earnings rally evaporated, erasing gains of as much as 10.3% to trade slightly negative. On the fiscal front, the August budget deficit brought the yearly shortfall to $1.96 trillion, with net interest topping $1 trillion for the year, according to CNBC's report on Treasury data.