Oil Prices Ease, Helping to Limit Worries About Inflation

Oil prices have eased, with Brent crude falling 2.5% to $86.75 a barrel, helping to limit worries about inflation. This decline has aided fuel-intensive companies, and traders now see a 32% chance of a Federal Reserve rate increase next month. The US stock market is nearing a record, with the S&P 500 rising 0.4% and the Dow Jones Industrial Average up 133 points. The easing of oil prices has also led to a decrease in wholesale inflation, which slowed to 4.7% from 5.5% in June. This has lowered expectations for a September Federal Reserve rate hike and pushed Treasury yields lower. The yield on the 10-year Treasury fell to 4.64% from 4.68%. Stocks of companies with big fuel bills, such as United Airlines and Carnival, have climbed on hopes for less pressure on their costs. However, Cisco Systems fell 9.4% despite reporting stronger profit and revenue for the latest quarter than expected. The price of gasoline has also been affected, with the national average price being $4.06/gal, the most expensive on record for this calendar day. If inflation continues to trend downward, the Federal Reserve could decide to hold off on hikes to interest rates.