| 📊 Alain’s Holdings — September 11, 2026 | ||||
|---|---|---|---|---|
| Symbol | Name | Price | Change | Change % |
| VOO | Vanguard S&P 500 ETF | 702.56 | +5.91 | +0.85% |
| QQQ | Invesco QQQ Trust | 714.88 | +6.19 | +0.87% |
| XIU.TO | iShares S&P/TSX 60 ETF | 52.92 | +0.36 | +0.68% |
Wall Street finally broke its losing streak Friday.
U.S. stocks rallied after four consecutive down days as investors digested a mixed inflation report and welcomed a sharp pullback in oil prices.
The interesting part?
The probability of a Federal Reserve rate hike actually increased.
Yet stocks rose anyway.
Market Performance
📈 Dow Jones Industrial Average: +1.0%
📈 S&P 500: +0.9%
📈 Nasdaq Composite: +1.0%
Despite Friday’s rebound, all three major indexes finished the week lower.
The Dow suffered its worst week since March.
But after several days dominated by $100-plus oil, surging Treasury yields and fears of another inflation wave, investors finally received enough good news to buy the dip.
Inflation Remains Stubbornly High
Friday’s big event was the August Consumer Price Index.
Headline inflation rose:
0.4% month over month
3.4% year over year
Both figures were essentially in line with economists’ expectations.
The more interesting number was core CPI, which strips out volatile food and energy prices.
Core prices increased 0.3% for the month, slightly hotter than the 0.2% economists expected.
On an annual basis, however, core inflation actually eased to 2.4% from 2.5%.
That’s an interesting combination.
The long-term trend is gradually improving.
But month-to-month inflation is still showing enough strength to make the Federal Reserve uncomfortable.
So Why Did Stocks Rally?
At first glance, Friday’s market reaction seems strange.
Inflation remains above the Fed’s target.
Core inflation was hotter than expected.
And traders dramatically increased expectations for another interest-rate hike.
Yet the Dow gained roughly 1%.
Why?
Because Wall Street had spent much of the week preparing for something worse.
The market had already absorbed four consecutive down days.
Oil had surged above $108.
The 10-year Treasury yield had approached 5%.
Investors were worried Friday’s CPI report could deliver another major inflation shock.
It didn’t.
Headline inflation landed exactly where economists expected.
Sometimes markets don’t need good news.
They just need the news to be less bad than feared.
Fed Rate-Hike Odds Surge
That doesn’t mean the Federal Reserve received an all-clear signal.
Far from it.
After Friday’s CPI report, financial markets increased the probability of a 25-basis-point rate hike next week to roughly 85%–90%.
That’s a remarkable shift.
One week ago, the probability was around 50%.
Yesterday, it was roughly 70%.
Today, the market considers a hike increasingly likely.
The reason isn’t simply today’s CPI report.
The Fed is looking at several inflationary signals simultaneously:
A strong August employment report.
Producer inflation running hot.
Core CPI rising faster than expected.
And an enormous energy shock caused by the Middle East conflict.
Put everything together, and the argument for another rate increase has become much stronger.
Oil Finally Gives Investors Some Relief
The biggest positive development Friday may actually have come from the energy market.
After surging above $108 earlier this week, oil finally retreated.
Brent crude fell roughly 2.8% to $104.61 per barrel.
WTI dropped about 2.4% to $100.05.
The catalyst was renewed hope that diplomatic talks could eventually improve shipping through the Strait of Hormuz.
That’s encouraging.
But perspective matters.
Oil still gained more than 8% this week.
So Friday’s decline doesn’t eliminate the energy problem.
It simply stopped it from getting worse—for one day.
Diesel Above $6 Is the Bigger Warning
One energy number deserves particular attention:
$6 per gallon diesel.
The U.S. national average diesel price has climbed above $6, reaching record nominal levels.
That matters because diesel isn’t simply something consumers buy at the pump.
Diesel powers trucks.
Farm equipment.
Construction machinery.
Delivery vehicles.
And enormous portions of America’s logistics network.
When diesel rises dramatically, the cost of moving almost everything rises with it.
Eventually those costs can appear in grocery stores, retail prices and corporate profit margins.
That’s why today’s CPI report doesn’t necessarily tell us what inflation will look like two or three months from now.
Much of the recent oil shock hasn’t yet flowed through the economy.
The 10-Year Treasury Tests 5%
The bond market provided another fascinating signal Friday.
The 10-year Treasury yield briefly approached 5% before retreating.
That suggests investors see two competing forces.
At the short end of the Treasury curve, expectations for another Fed hike are pushing rates higher.
But longer-term investors may be increasingly confident that tighter monetary policy will eventually contain inflation.
That’s potentially encouraging.
A credible Fed can sometimes raise rates without destroying the stock market.
If investors believe policymakers are serious about restoring price stability, a rate hike can actually reduce longer-term inflation uncertainty.
Could a Fed Hike Actually Help Stocks?
That sounds counterintuitive.
Normally:
Higher rates = bad for stocks.
But markets care about uncertainty too.
Imagine the Fed doesn’t raise rates next week despite:
3.4% headline inflation.
Hotter monthly core inflation.
A strong labor market.
And $100-plus oil.
Investors might begin questioning whether policymakers are sufficiently committed to bringing inflation back toward 2%.
That could push long-term Treasury yields even higher.
In that scenario, not hiking could actually be worse for stocks.
A quarter-point increase accompanied by a credible message that the Fed intends to control inflation could potentially reassure bond investors.
That’s one reason Friday’s stock rally and rising Fed-hike expectations aren’t necessarily contradictory.
Oracle’s AI Reality Check
Investors also digested Oracle’s earnings.
The company’s results offered another look at the enormous AI infrastructure boom.
Oracle reported strong cloud demand, reinforcing the argument that businesses continue spending aggressively on artificial-intelligence computing.
But investors remain increasingly focused on the other side of that equation:
How much does all this infrastructure cost?
With Treasury yields near 5%, financing massive data centers isn’t cheap.
That’s becoming one of the biggest questions surrounding the AI trade.
The demand appears real.
The spending is certainly real.
Now investors need evidence that the returns will justify the investment.
The Market Survived a Difficult Week
Friday’s rally shouldn’t obscure what happened during the rest of the week.
Stocks endured four consecutive losing sessions.
Oil surged above $108.
Treasury yields approached 5%.
Inflation remained stubborn.
And expectations for another Federal Reserve rate hike went from approximately a coin toss to nearly a certainty.
Yet the market didn’t collapse.
That’s important.
Corporate earnings remain relatively strong.
AI investment remains enormous.
The labor market remains resilient.
And investors continue buying meaningful dips.
The bull market is facing stronger headwinds.
But so far, it hasn’t broken.
The Bottom Line
Friday produced one of those market days that looks contradictory until you examine what investors were actually expecting.
Inflation wasn’t particularly good.
Core CPI was slightly hotter than forecast.
Fed rate-hike odds surged toward 85%–90%.
Yet stocks rallied.
Why?
Because investors had spent the week preparing for something worse.
Oil finally declined.
Headline inflation matched expectations.
Long-term Treasury yields backed away from 5%.
And Wall Street decided that much of the bad news was already reflected in stock prices.
Now everything turns toward the Federal Reserve’s September 15–16 meeting.
A quarter-point hike increasingly looks like the base case.
But the actual rate decision may not be the most important part.
Investors will be listening carefully to Fed Chair Kevin Warsh for the answer to a much bigger question:
Is this one rate hike—or the beginning of another tightening cycle?
That answer could matter considerably more than 25 basis points.
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