Wall Street Rallies on Soft CPI Data, Micron Earnings Fuel AI Rebound as Central Banks Hold Course
Equity markets mostly advanced on Thursday after cooler-than-expected US inflation data boosted investor confidence, triggering a rebound in technology stocks, while major central banks avoided any surprise policy moves.
In the United States, consumer inflation slowed unexpectedly in November, rising 2.7 percent year-on-year, well below market expectations of a 3.1 percent increase. The softer reading eased concerns over persistent price pressures and strengthened hopes that the Federal Reserve could adopt a more accommodative stance.
“Although this is just one inflation reading and not the Fed’s preferred gauge easing inflation concerns could open the door to a more accommodative Fed going forward,” said Bret Kenwell, analyst at eToro.
Wall Street Climbs as Tech Stocks Bounce
US stocks closed higher, led by gains in the technology sector. The Nasdaq Composite jumped 1.4 percent, while the S&P 500 rose 0.8 percent and the Dow Jones Industrial Average edged up 0.1 percent.
Technology shares surged after Micron Technology posted blockbuster earnings, reporting that quarterly profits nearly tripled to $5.2 billion, driven by strong demand linked to artificial intelligence. Micron shares soared more than 10 percent.
Other major AI-related stocks also advanced, with Alphabet, Nvidia, and Meta Platforms each gaining around two percent or more. Oracle, which fell sharply in the previous session, recovered with a 0.8 percent gain.
“The sector was lifted by a strong set of quarterly results from Micron Technology,” said David Morrison, analyst at Trade Nation.
However, Morrison cautioned that it remains unclear whether the rally signals the start of a traditional ‘Santa Claus Rally’ or merely a bout of short-covering after recent losses.
Central Banks Stay the Course
In Europe, markets welcomed stability from central banks. The European Central Bank kept interest rates unchanged for the fourth consecutive meeting, while slightly upgrading its growth outlook for this year and next.
“The new macroeconomic projections suggest there is little scope for further easing in the short term,” said GianLuigi Mandruzzato, senior economist at EFG Asset Management.
ECB President Christine Lagarde said future policy decisions remain open, citing heightened global uncertainty.
European stocks closed higher, with gains recorded in Frankfurt and Paris.
Meanwhile, the Bank of England cut its benchmark interest rate to 3.75 percent, as UK inflation slowed faster than expected and economic conditions weakened.
Asia Mixed as AI Spending Concerns Persist
Asian markets delivered a mixed performance, with most indices falling after the previous day’s Wall Street sell-off. Investor sentiment in the region remained weighed down by concerns over the massive capital spending by technology firms on artificial intelligence.
Market Snapshot (Around 21:15 GMT)
United States
- Dow Jones: ▲ 0.1% at 47,951.85
- S&P 500: ▲ 0.8% at 6,774.76
- Nasdaq Composite: ▲ 1.4% at 23,006.36
Europe
- London FTSE 100: ▲ 0.7% at 9,837.77
- Paris CAC 40: ▲ 0.8% at 8,150.64
- Frankfurt DAX: ▲ 1.0% at 24,199.50
Asia
- Tokyo Nikkei 225: ▼ 1.0% at 49,001.50
- Hong Kong Hang Seng: ▲ 0.1% at 25,498.13
- Shanghai Composite: ▲ 0.2% at 3,876.37
Currencies
- Euro/Dollar: $1.1721
- Pound/Dollar: $1.3378
- Dollar/Yen: ¥155.63
Commodities
- Brent Crude: ▲ 0.2% at $59.81 per barrel
- WTI Crude: ▲ 0.4% at $56.15 per barrel
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