US Stocks Hold Steady as Oil Prices Rise

Steve Auth, Executive Vice President & CIO: Equities at Federated Hermes, discusses the markets heading into 2026 and whether or not the AI boom signals a dangerous market bubble.

Wall Street traders gearing up for inflation data drove bonds away from session lows as Federal Reserve Governor Christopher Waller signaled support for further rate cuts. Stocks wavered. Oil jumped.

With the consumer price index running the risk of being less reliable than usual due to government-shutdown disruptions, Waller’s remarks were closely watched for fresh Fed insights. While investors saw his comments as more dovish, the official also warned there’s no need to rush amid elevated inflation.

The November CPI report on Thursday will offer only a partial snapshot of inflation, without monthly changes for most of the price categories.

That explains the relative sense of apathy regarding the data, with options traders betting the S&P 500 will swing 0.7% in either direction, according to data compiled by Barclays Plc. That’s sharply lower than the 1% average realized move spurred by the 12 reports delivered through September.

Earlier this week, the high-profile jobs report also drew limited reaction. The data was impacted by the federal closure and proved to be a noisy reading showing the labor-market is slowing, but not collapsing.

“The muted response to the employment data is likely to be repeated – after all, the data quality concerns with payrolls are also applicable to CPI,” said Ian Lyngen at BMO Capital Markets. “At least insofar as there will be a reasonable amount of skepticism regardless of how the data ultimately comes in.”

The S&P 500 was little changed. Micron Technology Inc. is reporting earnings after the close, and the pressure is on with investors growing increasingly skeptical about the artificial intelligence trade.

The yield on 10-year Treasuries was little changed at 4.15%. The dollar added 0.1%.

Oil rallied as the US prepares new measures against Russia if Moscow rejects a peace deal, and blockades sanctioned tankers off Venezuela.

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