Stocks finished the holiday-shortened week lower as a jump in oil and rising Treasury yields renewed concerns about inflation and the Federal Reserve’s next steps. A late-week rally trimmed losses, but the Dow, S&P 500 and Nasdaq still ended the week in the red after energy and rates steadied only on Friday.
The Dow led declines, falling 1.6% on the week, while the S&P 500 lost 0.8% and the Nasdaq fell 0.7%. Oil climbed notably amid escalating U.S.-Iran tensions, pushing West Texas Intermediate above $100 a barrel on Thursday for the first time in nearly four months, and leaving WTI up more than 9% for the week despite Friday’s pullback. Bond markets moved in tandem, with the yield on the 10-year Treasury topping 4.95% Thursday, its highest level since October 2023.
Inflation prints ahead of the Fed meeting did little to calm markets. Thursday’s producer price index rose 0.4% month over month, and Friday’s consumer price index showed headline inflation up 0.4% for the month and 3.4% year over year. Core CPI, which strips out food and energy, increased 0.3% month over month, slightly above expectations. With these readings the last major datapoints before the Sept. 15-16 Fed meeting, the market pushed the odds of a September rate hike to 87%, from 58% the prior week, per the CME FedWatch tool, and traders are beginning to price a second hike before year end.
Still, two large-cap technology names in the portfolio provided reasons for optimism on longer time horizons. Meta Platforms followed its Sept. 2 release of the Muse Spark 1.3 model with the launch of a Muse personal AI agent that ties into Facebook, Instagram and WhatsApp, leveraging 3.6 billion daily active users. Those moves, plus Meta’s substantial computing infrastructure, underpin the case that its AI investments could generate future revenue, a point that stands against the stock’s current valuation of roughly 19 times 2027 earnings estimates and expected 20% revenue growth in the Family of Apps business. Meta shares rose 5% over the week, and the stock carries a buy-equivalent 1 rating in the Investing Club portfolio.
Apple also supplied a lift. The company unveiled a foldable iPhone, the iPhone Duo, starting at $1,999, alongside upgraded iPhone 18 Pro and Pro Max models that include $100 price increases. New CEO John Ternus framed the iPhone as an “intelligent personal hub,” with an AI-upgraded Siri able to access more than 300,000 apps, positioning Apple in the emerging market for personal AI agents. Apple shares gained nearly 4% on the week.
What happens next is clear: markets will focus on the Sept. 15-16 Fed meeting and any forward guidance tied to inflation and energy prices. If crude and yields remain elevated, investors will likely reassess rate expectations; if AI product launches translate into measurable revenue gains over time, Meta and Apple could widen their strategic leads.
