S&P 500 Rises As Markets Price In Fed Rate Hike

US stocks closed higher on Friday as investors increased their expectations of a Federal Reserve interest-rate hike next week. Retreating oil prices also supported sentiment.

The S&P 500 advanced 0.86% to 7,656.98. The Nasdaq Composite gained 0.96% to 26,333.04, while the Dow Jones Industrial Average climbed 0.98% to 52,573.29 at the end of the session.

Fresh consumer-price data showed inflation accelerated last month. A rebound in petrol prices after two consecutive monthly declines added to concerns over persistent inflation.

Markets are now pricing in a nearly 90% chance of a rate increase at the Fed's policy meeting on Wednesday.

Technology Shares Lead Wall Street Higher

Technology stocks were among the strongest performers during Friday's session. Dell surged 12% to a record high, while Hewlett Packard Enterprise also jumped 12%.

HP shares rose 8.4% after Oracle reported quarterly results that exceeded analysts' expectations. Oracle shares, however, fell 1.8%.

Nine of the 11 major S&P 500 sectors ended in positive territory. Communication services led the gains with a 1.35% rise, followed by consumer discretionary, which added 1.13%.

Trading activity remained relatively subdued. Around 14 billion shares changed hands on US exchanges, compared with an average of 14.9 billion over the previous 20 sessions.

The CBOE Volatility Index, commonly known as Wall Street's fear gauge, fell by two points to 15.88.

Oil Prices, Valuations And Weekly Performance

Friday's gains came after a period of caution in US markets. Investors have been concerned about inflation, rising long-term Treasury yields and the heavy spending required to build artificial-intelligence data centres.

The S&P 500 remains about 2% below its record closing high from 13 August. Despite the recent pullback, the index is still up 12% in 2026. For the week, however, the S&P 500 declined 0.8%. The Nasdaq fell 0.7%.

The S&P 500 is down in recent days, but a strong earnings outlook has the benchmark trading at 19 times expected earnings. That is its lowest valuation since April 2025, when tariff announcements by US President Donald Trump triggered a sharp sell-off across global markets.

Oil prices declined on Friday but remained about 9% higher for the week. Concerns over potential supply disruptions increased after attacks along Middle Eastern shipping routes. Brent crude futures dropped almost 3% but remained above $104 a barrel.

Elsewhere, ACV Auctions surged 44%. The rise followed Copart's agreement to acquire the online vehicle auction company in a deal worth nearly $1.9 billion.

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