Wall Street says goodbye to the weekend on a friendly note. The price of oil is falling, but remains at a high level. US investors now consider it a foregone conclusion that the Fed will raise interest rates due to high inflation.
Falling oil prices gave US stock markets a boost at the end of the week. However, the prospect of rising interest rates in the fight against stubbornly high inflation limited the recovery movement. The Dow Jones index of standard stocks closed almost one percent higher at 52,573 points. The broader S&P 500 gained 0.9 percent to 7,656 positions. The Nasdaq technology exchange index also advanced one percent to 26,333 points.
The price gains were broad. All sector indices of the S&P 500 were up. The strongest areas included technology stocks and communications services stocks. Securities from chip manufacturers and precious metal mines also rose significantly. "The market may have been temporarily in an oversold state and we are now seeing some relaxation," said Andre Bakhos, managing member at Ingenium Analytics.
Inflation remains stubborn
Crude oil prices, which had recently risen sharply, fell by almost three percent at the end of the week: at over $104 per barrel, the North Sea Brent variety was still heading for a weekly increase of around nine percent. Bets for a Fed rate hike next Wednesday increased following the latest inflation data. Traders on the futures markets now estimate the probability of the Fed tightening monetary policy by a quarter of a percentage point to be around 90 percent; previously it was around 70 percent.
Goods and services rose in price in August by 3.4 percent compared to the same month last year, which was in line with economists' expectations. “Markets are pricing in a scenario with higher interest rates in the longer term,” said Gustav Helgesson, macro strategist at SEB. According to the data, the yield on the ten-year US government bond jumped to its highest level in almost three years at 4.992 percent. US consumer sentiment deteriorated noticeably in September. The barometer for consumer sentiment fell to 47.8 points, after 51.7 points in August, as the University of Michigan announced.
Tech stocks asked about Oracle numbers
On the stock market, Oracle caused movement in the technology sector. The cloud specialist exceeded expectations with its quarterly results, which strengthened shareholders' belief that investments in artificial intelligence are paying off. However, Oracle shares gave up their initial gains of eight percent and closed slightly in the red.
In the wake of the numbers, Dell jumped by around twelve percent to a record high. Hewlett Packard Enterprise rose by almost ten percent, HP rose by around seven percent. After initial losses, Adobe went up around half a percent. However, the software developer disappointed investors with its sales forecast for the fourth quarter.
Investors, however, were fully satisfied with the quarterly figures of the US supermarket chain Kroger. The shares rose by around 2.5 percent. At $34.6 billion, sales narrowly exceeded analysts' estimates. Adjusted earnings per share of $1.09 were above expectations of $1.06. The announced takeover of the online vehicle auctioneer ACV Auctions by rival Copart for almost 1.9 billion dollars also caused a lot of discussion. ACV shares then gained around 44 percent.
