A hike is basically locked in, and stocks rallied anyway

Headline CPI rose 0.4% on the month, up from 0.1% in July, and 3.4% over the year — in line with forecasts and unchanged from July. Core was 0.3% on the month, a touch hotter than expected, while the core annual rate eased to 2.4% from 2.5%. Gasoline rose 3.9% and made up more than a third of the headline gain. CME FedWatch odds of a hike at next week's meeting went to 86.7%, from 72.4% Thursday and 59.4% a week ago. Stocks rose anyway — the S&P 500 up 0.88%, the Nasdaq 100 0.94%, the VIX down 11.1% to 15.86 — with a pullback in oil reported as the reason risk appetite came back.

The stock opened at $155.57, ran to $165.90 intraday chasing Wednesday's $664bn RPO number, and gave it all back to close at $150.38 — down 1.67% on the day, below where it sat before it even reported. The same capex-and-cash-burn story that's dogged Oracle since summer reasserted itself: fiscal 2026 capex ran $55.7bn against free cash flow of negative $23.7bn, fiscal 2027 net capex is guided to roughly $70bn, and about $40bn of that is planned to come from debt and equity, including a $20bn share sale already underway. A $664bn backlog is only as good as what it costs to build.

WTI settled around $100.05, down 2.0%; Brent settled near $104.60, down 2.5%. $USO fell 3.2%. Still up sharply on the week — Brent on pace for roughly an 8% weekly gain — so today reads as a pullback inside the move, not a reversal of it.

The S&P 500 fell 0.78% across the week, from 7,718.60 last Friday to 7,658.63 today. The VIX went from 14.53 to 15.86, up 9.2%, after touching 17.84 on Thursday. The 2-year rose 7bp to 4.63% today and is up 26bp on the week — but the 30-year actually fell 2bp today, so 10s2s compressed to 33bp from 39bp. A hike got priced in without an inflation or growth scare showing up at the long end. PPI, CPI, a second Hormuz escalation and an Oracle earnings round trip, all inside four sessions.