Wall Street rises as inflation data strengthens rate-hike expectations

Wall Street finished higher on Friday as falling oil prices helped support stocks, while stronger-than-expected consumer price data increased expectations that the US Federal Reserve will raise interest rates next week.

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

Technology stocks were among the strongest performers, with several companies benefiting from continued investor enthusiasm surrounding artificial intelligence and cloud computing.

AI server manufacturer Dell Technologies surged 12% to a record high. Hewlett Packard Enterprise also climbed 12%, while HP rose 8.4% following strong quarterly results from Oracle that exceeded market expectations.

Oracle shares fell 1.8% despite the company's results, as investors assessed its outlook against the broader surge in demand for AI-related computing and cloud services.

US consumer prices accelerated in August, with gasoline costs rebounding after two consecutive monthly declines. The increase added to concerns about persistent inflation and strengthened expectations that the Federal Reserve may adopt a more restrictive monetary policy.

Financial markets are now pricing in an almost 90% probability that the central bank will increase interest rates at its policy meeting on Wednesday.

The prospect of higher interest rates has increased pressure on investors to reassess valuations, particularly across growth and technology stocks, although Friday's gains suggested markets remained resilient in the face of the inflation data.

Retreating oil prices provided some relief by easing concerns about an additional source of inflationary pressure. However, the combination of rising consumer prices and expectations of tighter monetary policy is likely to remain a key focus for markets in the coming week.