Stock Futures Bounce Pre-CPI as Rate-Hike Odds Hit 72% — SkimNews
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- US stock futures rose in premarket trading (Dow +0.5%, S&P 500 +0.5%, Nasdaq-100 +0.6%) on Friday, partially recovering from a four-day losing streak as major indexes headed for weekly declines.
- August CPI report — expected to show prices up 0.4% month-over-month and 3.4% year-over-year — is the final inflation data point before Fed policymakers convene next week, with core CPI forecast at +2.4% annually.
- Fed rate-hike bets surged to 72% for this month's meeting, up from a 50-50 coin-flip just a week earlier, driven by oil prices topping $106/barrel (Brent crude) and US diesel hitting a record $6/gallon.
- Oracle (ORCL) shares jumped over 5% premarket after reporting cloud infrastructure revenue of $7.4 billion (up 121% year-over-year), beating analyst estimates of $7.19 billion on surging AI data center demand.
- Oracle also completed a $20 billion at-the-market equity sale and added 850 megawatts of data center capacity in the quarter, building infrastructure for OpenAI and other AI customers.
- Fed officials remain divided over whether to raise benchmark rates or hold steady to assess whether past hikes are reducing inflation, which remains well above the Fed's 2% goal.
Why it matters: Traders rapidly repriced Fed expectations from a coin-flip to a 72% probability of a rate hike this month — a stark reversal driven by surging oil (Brent above $106, diesel at a record $6/gallon) that complicates the Fed's inflation fight. Oracle's 121% cloud revenue jump shows AI infrastructure spending is accelerating despite macro uncertainty, with Wall Street watching the pace of its data center buildout.
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