Wall Street heads for gains after oil prices ease and inflation update comes in near expectations

NEW YORK (AP) — The U.S. stock market appears to be heading for gains ahead of Friday's opening of trading as oil prices give back some of the week's big spurt.

Futures were up 0.7% for the S&P 500 index, 0.7% for the Dow Jones Industrial Average and 0.8% for the Nasdaq 100 index, with a little less than an hour before trading is set to begin.

They got some help from easing oil prices, which jumped earlier this week to their highest levels since May because of the ongoing war with Iran. The price for a barrel of Brent crude, the international standard, fell 3% to $104.44.

That helped take a bit of pressure off inflation, which remains far higher than anyone would like. A report on Friday showed that U.S. consumers had to pay prices for gasoline, food and other costs of living that were 3.4% higher last month than a year earlier.

The data firmed expectations on Wall Street that the Federal Reserve will feel compelled to hike its main interest rate at its meeting next week. Such hikes are the typical way the Fed tries to rein in high inflation, and they work by filtering through the bond market, making it more expensive for everyone to borrow money, slowing the economy and hopefully removing fuel for further inflation.

Such rising expectations sent the yield of the two-year Treasury, which moves with guesses for upcoming Fed action, to 4.58% from 4.56% late Thursday.

Longer-term yields, though, actually eased. That could be an indication that investors in the bond market see upcoming hikes to rates by the Fed as helping to keep control of inflation over the longer term.

The yield on the 10-year Treasury fell to 4.92% from 4.95% late Thursday.