Investing.com – Wall Street traded lower on Friday after a slight uptick in inflation lifted the odds for the Federal Reserve (Fed) to return to the path of policy tightening in 2016.
At 11:07AM ET (15:07GMT), the Dow 30 fell 85 points, or 0.47%, the S&P 500 lost 13 points, or 0.59%, while the tech-heavy Nasdaq Composite traded down 21 points, or 0.40%.
Year-on-year, the consumer price index (CPI) for August increased 1.1%, while the core CPI rose 2.3%.
Analysts had expected headline inflation to rise 1.0% and core inflation to advance 2.2%.
The slight uptick gives a bit more ammunition to Fed hawks who are looking for a reason to raise rates with the core CPI above the central bank’s 2% inflation target.
Markets adjusted rate hike odds on Friday to once again include the possibility of a rate hike in December, according to Investing.com's Fed Rate Monitor Tool.
The odds for an end of the year move increased to 51.2% on Friday, from just 44.7% the day before.
However, the probability for a hike at next Wednesday’s meeting remain unchanged at 12%, as weak retail sales data, declining for the first time in five months, and a worse than expected read in industrial production on Thursday were expected to keep the Fed in check.
Also out on Friday, Michigan consumer sentiment for September remained unchanged, missing consensus.
However, while the consumer expectations did beat consensus and the University of Michigan noted that all of the changes were “relatively minor”.
“Overall, consumers remain reasonably optimistic about their economic prospects,” the surveyor said.
“Real personal consumption expenditures can be expected to grow by 2.6% through mid 2017,” the report concluded.
In oil markets, crude prices fell on Friday on worries that U.S. rig counts would continue to rise and that returning Libyan and Nigerian exports would stoke a global supply glut.
Stoking that concern, Iran’s exports hit another record high in August, according to sources cited by Reuters on Friday.
According to the report, strong demand in Asia and Europe allowed Iran to produce just over 3.8 million barrels per day (bpd), though that was still shy of the 4 million bpd that the country had said was a precondition for discussing output limits with Saudi Arabia and Russia at the informal gathering on the sidelines of the International Energy Forum on September 26 to 28.
Still ahead, Baker Hughes U.S. rig count data for the week to Sept. 16 is due later on Friday. Last week, the oil services firm reported that U.S. drillers added oil rigs for a tenth straight week.
West Texas Intermediate was on track for weekly losses of almost 6%.
U.S. crude futures lost 1.34% to $43.32 by 11:09AM ET (15:09GMT), while Brent oil traded down 0.94% to $46.15.