Pre-Market Update: August CPI Holds at 3.4% as Fed Rate-Hike Odds Rise to 72%
Key Takeaways
- •August CPI showed overall consumer prices rising 3.4% from a year earlier and 0.4% on the month, keeping inflation above the Federal Reserve's 2% target.
- •Core CPI, which excludes food and energy, rose 2.4% year over year, but its 0.3% monthly increase surpassed the expected 0.2%, signaling firmer underlying price pressure.
- •Traders raised the implied probability of a Federal Reserve rate hike at next week's policy meeting to 72%, up from roughly 50% the prior week.
- •Energy costs intensified inflation concerns as Brent crude climbed above $108 per barrel and diesel prices reached a record $6 per gallon.
- •Oracle shares gained more than 5% in Friday premarket trading after the company reported strong cloud-computing growth in its latest quarterly results.
U.S. stock futures rose Friday morning as investors assessed fresh inflation data showing that prices remained above the Federal Reserve’s target ahead of next week’s policy meeting.
Dow Jones Industrial Average futures gained 0.5%, while S&P 500 futures also rose 0.5% and Nasdaq-100 contracts edged up 0.6%. The move came after all three major indexes recorded four consecutive losing sessions and were on track for weekly declines.
August CPI Report Shows Faster Monthly Increase
The Bureau of Labor Statistics released the August Consumer Price Index report at 8:30 a.m. Eastern time. Overall consumer prices increased 3.4% year over year, matching July’s reading. On a monthly basis, prices rose 0.4%, up from 0.1% in July.
Core CPI, which excludes food and energy, increased 2.4% year over year, slightly below July’s 2.5%. Core prices rose 0.3% month over month, compared with 0.2% in July. The monthly core measure provides a separate view of underlying price pressure because it removes the more volatile food and energy categories.
The headline and core annual figures matched economist estimates. However, the monthly increase in core prices exceeded the 0.2% expectation. Inflation also remained above the Federal Reserve’s 2% target.
Wall St Engine reported the data on X:
AUGUST U.S. 🇺🇸 INFLATION DATA: CPI 3.4% YoY, (Est. 3.4%) CPI 0.4% MoM, (Est. 0.4%) Core CPI 2.4% YoY, (Est. 2.4%) Core CPI 0.3% MoM, (Est. 0.2%) — Wall St Engine (@wallstengine) September 11, 2026
https://x.com/wallstengine/status/2098388729958453478?ref_src=twsrc%5Etfw
Odds of Fed Rate Hike Rise
Markets adjusted quickly after the report. Traders raised the probability of a Federal Reserve rate hike at next week’s meeting to 72%, up from roughly 50% the previous week.
The Fed has been working to contain inflation for more than a year. Although price increases have slowed since May, the latest figures continued to show pressure for policymakers. The upcoming meeting will give officials an opportunity to respond to the latest inflation reading and update their policy guidance.
Energy prices added to those concerns. Brent crude rose above $108 per barrel before easing slightly Friday, while diesel prices reached a record $6 per gallon. Higher energy costs can affect both headline inflation and consumer spending.
Rising Treasury yields also contributed to higher borrowing costs across mortgages, credit cards, and corporate loans.
Oracle Shares Gain on Cloud Growth
Oracle was a notable gain in Friday’s premarket trading. The company’s shares climbed more than 5% after it reported strong cloud-computing growth in its latest quarterly results.
The advance came as the broader market responded to the inflation report and higher expectations for interest-rate increases.
Source: CoinCentral
