Wall Street flipped the script on Thursday, with stocks climbing after Wednesday’s tech-led sell-off ran out of steam.
Investors brushed aside recent AI anxiety and focused instead on fresh inflation data that landed cooler than expected, reviving hopes that interest rates may have peaked.
The Nasdaq Composite led the charge, jumping 1.6% as battered tech names found their footing again. The S&P 500 followed with a gain of around 1%, while the Dow Jones Industrial Average lagged slightly but still rose about 0.3%.
Tech stocks were also helped by Micron’s earnings. The chipmaker forecast next quarter’s adjusted profit at nearly double analyst expectations, offering reassurance on AI demand after Oracle’s $10 billion data centre setback rattled the sector earlier in the week.
The day’s big talking point was the latest US Consumer Price Index. Headline inflation came in at 2.7% year on year for November, with core inflation at 2.6%. Both were below forecasts, which had pencilled in readings closer to 3% and 3.1%. For markets sensitive to any hint of easing price pressures, that was enough to change the tone.
Economists have warned the data may be less reliable than usual due to the US government shutdown, a concern also raised after Tuesday’s jobs report.
Even so, the Federal Reserve appears increasingly focused on the labour market rather than inflation. Fed governor Chris Waller had already opened the door to rate cuts on Wednesday, before the CPI figures were released.