Finance

The Labor Department's consumer price index for August showed headline inflation holding steady at an annual rate of 3.4%, which matched consensus forecasts. However, underlying core inflation trends came in slightly stronger than anticipated. Following the data release, market odds surged to nearly 90% that the Federal Reserve will implement a quarter-percentage-point interest rate increase at its upcoming policy meeting.

Oil prices fell from recent peaks, with Brent crude dropping under $105 per barrel and West Texas Intermediate sliding back below the $100 mark. The pullback occurred amid reports that Iran and regional Gulf nations plan to meet to discuss shipping security in the impaired Strait of Hormuz. Despite the single-day decline, benchmarks secured a weekly gain of more than 8% due to ongoing geopolitical tensions and record-high domestic diesel costs.

Fixed-income markets experienced continued pressure as sticky economic data and energy volatility kept borrowing benchmarks elevated. The yield on the 10-year U.S. Treasury note hovered near 4.96% after briefly testing its highest intraday level in nearly three years at 4.99%. Concerns over persistent inflation have led major financial institutions to revise their forecasts to include multiple rate hikes before the end of the year.