Finance

The U.S. consumer price index for August showed headline inflation holding steady at 3.4% annually, matching consensus estimates. However, core inflation metrics excluding food and energy arrived slightly firmer than anticipated at a 0.3% monthly pace. In response to the persistent pricing pressures, traders sharply increased the implied probability of a 25-basis-point interest rate increase at the Federal Reserve's upcoming policy meeting to roughly 87%.

Crude oil futures took a breather on Friday, with Brent crude sliding nearly 3% to settle at $104.61 per barrel and West Texas Intermediate falling below $100. The retreat followed reports that Middle Eastern foreign ministers are attempting to negotiate a temporary deal to secure shipping through the Strait of Hormuz. Despite the single-day drop, oil prices finished the week significantly higher as ongoing conflict in Iran and Houthi activity in the Bab al-Mandeb strait continue to restrict energy flows.

U.S. government bond yields remained highly elevated, with the benchmark 10-year Treasury note flirting with 4.96% after briefly touching 4.99% following the inflation release. In addition to geopolitical and macroeconomic concerns, the bond market faced upward pressure after a Treasury Department buyback operation fell short of its maximum $6 billion target. The government purchased only $5.2 billion in long-term debt, frustrating investors who had anticipated a more aggressive intervention to temper rising borrowing costs.