U.S. stocks rebounded on Thursday, snapping a four-day losing streak, as soft inflation data raised hopes of interest rate cuts by the Federal Reserve in 2026 and blowout guidance from Micron Technology hinted at robust demand for artificial intelligence (AI). All three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 0.1% or 65.88 points, to finish at 47,951.85 points.
The S&P 500 climbed 0.8%, or 53.33 points, to close at 6,774.76 points. Tech and consumer discretionary stocks were the biggest gainers.
The Technology Select Sector SPDR (XLK) and the Consumer Discretionary Select Sector SPDR (XLY) each gained 1.5%. The Utilities Select Sector SPDR (XLU) rose 1%. Six of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq jumped 1.4%, or 313.04 points, to end at 23,006.36 points.
The fear gauge, CBOE Volatility Index (VIX), was down 4.26% to 16.87. Advancers outnumbered decliners on the NYSE by a 1.9-to-1 ratio. On the Nasdaq, a 1.63-to-1 ratio favored advancing issues. A total of 16.89 billion shares were traded on Thursday, lower than the last 20-session average of 16.96 billion.
On the Nasdaq, there were 2,892 new 52-week highs and 1,773new lows. On the NYSE, there were 216 new 52-week highs and 105 new lows.
Soft Inflation Data Boost Investors’ Confidence
Stocks rebounded on Thursday, ending four consecutive sessions of losses, after softer-than-expected inflation data gave investors’ confidence a boost and raised hopes of lower interest rates next year.
The consumer price index (CPI) report for November, which was delayed due to the 43-day government shutdown, showed that CPI rose 2.7% year over year last month, lower than the consensus estimate of a rise of 3.1%, according to the Bureau of Labor Statistics.
Core CPI, which excludes the volatile food and energy prices, rose 2.6% year over year in November, also lower than economists’ expectations of a rise of 3%. The report was originally scheduled for release on Dec. 10, but the government shutdown delayed it. The Labor Department, however, didn’t release the October CPI report. It said that CPI rose a combined 0.2% month over month for October and November.
Stocks rallied following the release of the CPI report. Also, jobless claims came in below analysts’ expectations, which further gave investors’ confidence a boost.
Macron Drives Market Rally
Thursday’s rally was once again driven by AI stocks, with Micron Technology, Inc. (MU) leading from the front after the company gave a blowout revenue guidance for the current quarter.
The semiconductor giant nearly doubled its profit forecast for the ongoing quarter, citing solid AI-related demand. Micron’s shares ended the day 10.1% higher. Micron carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Shares of other chipmakers also jumped following the announcement. Shares of Sandisk Corporation (SNDK) jumped 6.1%, while Western Digital Corporation (WDC) rose 5.3%.
Economic Data
In other economic data released on Thursday, the Labor Department said that jobless claims totaled 224,000 for the week ending Dec. 18, a decrease of 13,000 from the previous week. The four-week moving average was 217,500, an increase of 500 from the previous week’s revised average of 217,000.
Continuing claims came in at 1,897,000, an increase of 67,000 from the previous week’s revised level of 1,830,000. The 4-week moving average was 1,902,000, a decrease of 14,000 from the previous week's revised average of 1,916,000.
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Western Digital Corporation (WDC): Free Stock Analysis Report Micron Technology, Inc. (MU): Free Stock Analysis Report Sandisk Corporation (SNDK): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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