Inflation accelerates, fueling bets on a Federal Reserve rate hike

U.S. consumer prices rose 3.4% in August from a year earlier, with the CPI up 0.4% month over month and gasoline prices rising about 3.9%, accounting for a third of the monthly increase. Excluding food and energy, core inflation was 2.4% year over year and 0.3% for the month, suggesting broader price pressures beyond fuel. Traders priced in roughly a 90% probability of a Federal Reserve rate hike next week. Tech prices led gains as software and hardware costs climbed and Apple raised prices on older iPhone models due to chip costs, underscoring inflation risks and the case for tighter policy.