September 11, 2026

U.S. equities are set to open firmly higher on Friday, shrugging off the reality of an imminent Fed rate hike in favor of an in-line inflation report and a bid across growth and cyclical names. S&P 500 futures sit +0.90% near 7667, Nasdaq futures lead at +1.04%, and Dow futures track +0.96%. The August CPI delivered no surprises at the headline (+0.4% MoM, +3.4% YoY) and core held at 2.4% YoY, though the 0.3% core monthly gain underscores that disinflation has stalled. Critically, the print removed a tail risk — a hotter number that could have forced talk of a larger move — allowing traders to lean into the 'sticky but stable' narrative.

Sector leadership is unambiguously risk-on. Technology (+1.51%) paces the tape, with semiconductors doing the heavy lifting: AMD +1.87%, AVGO +1.42%, and NVDA +1.41%. Oracle's earnings-driven jump has reignited the AI capex trade and lifted the broader complex. Financials (+1.14%) are the other standout, benefiting from the higher-for-longer rate backdrop — MS +1.82%, JPM +1.40%, and BAC +0.98% all indicated meaningfully higher. Communication Services (+0.84%) gets a boost from META +2.01%, while EQIX +4.51% is an outlier lifting Real Estate.

The lone soft spot is Energy (-0.83%), weighed down by WTI crude's 2.96% slide to $99.45. Yesterday's EIA data showed a smaller-than-expected crude draw (-0.391M vs -1.6M forecast) alongside builds in gasoline and distillate stocks, pressuring XOM (-0.96%), COP (-1.54%), and VLO (-1.15%). The crude retreat is a double-edged sword — bearish for the energy patch but a welcome offset to forward inflation pressures. Gold, meanwhile, climbed 1.27% to $4,419.80 as a hedge into the FOMC.

All eyes are on the September 16 FOMC decision, where prediction markets now assign an 80% probability to a 25 bps hike (to 4.00%) and a 93% chance of no cuts across the entirety of 2026. That hawkish repricing has not deterred the equity bid, suggesting investors are comfortable that a well-telegraphed hike is fully discounted. The dot plot and Fed projections next Wednesday will be scrutinized for the terminal-rate path. Before then, this afternoon's preliminary University of Michigan sentiment (F: 51 vs 51.7 prior) and its inflation expectations components (1-yr F: 3.9%, 5-yr F: 3.2%) offer a read on the consumer.

Options positioning flags complacency: SPY ATM implied vol is depressed with an IV Rank of 0, and the nearest-expiry implied move is just ±1.1%. Dealers sit in positive gamma with a call wall at 760 and put wall at 750 — a configuration that tends to pin and suppress realized volatility. That said, a 25-delta put skew of 2.3% and a put/call volume ratio of 1.19 show some hedging demand persists beneath the surface. With Nikkei down 1.93% overnight as a reminder that global risk is uneven, near-term direction hinges on whether the Michigan data and next week's FOMC validate the market's benign read of an inline CPI.