Stock market today: Dow, S&P 500, Nasdaq rise as CPI remains sticky, Fed rate-hike bets jump

US stocks experienced an upward trend on Friday, as investors reviewed the Consumer Price Index (CPI) data, which indicated that inflation remained persistent. This led to a surge in bets that the Federal Reserve would increase interest rates next week. The Dow Jones Industrial Average (^DJI) and the tech-driven Nasdaq Composite (^IXIC) climbed by approximately 0.9%, while the S&P 500 (^GSPC) rose by 0.8%.

However, both the Dow and Nasdaq posted weekly declines after a four-day losing streak. Inflation remained a focal point for investors, with the CPI showing a modest increase of 0.4% on a monthly basis and 3.4% over the past year. After adjusting for volatile food and energy prices, the Fed's preferred measure of inflation rose by 0.3%, surpassing expectations but still below the 2% target set by the Federal Reserve.

This prompted traders to increase their anticipation of a rate hike, with the CME's FedWatch tool now reflecting an 87% probability of a 25 basis point increase at the upcoming Federal Open Market Committee (FOMC) meeting. The rise in oil prices contributed to inflation concerns, as Brent crude prices surpassed $108 per barrel and diesel reached its highest price ever at $6 per gallon.

However, crude prices eased slightly by Friday, with WTI crude falling to $100 per barrel. The mixed signals from oil prices added complexity to the market's outlook. Investors now face the uncertainty surrounding the Fed's decision, as well as geopolitical events, such as Saudi Arabia's closure of its critical East-West oil pipeline due to attacks. This development could impact global oil supply and further influence market sentiment.