NEW YORK – U.S. stock market closed higher on Thursday after an encouraging inflation report eased investor concerns and raised hopes that the Federal Reserve may continue cutting interest rates next year. Strong earnings from Micron Technology also helped stabilise artificial intelligence (AI) stocks after recent declines.
The S&P 500 rose 0.8%, snapping a four-day losing streak, while the Dow Jones Industrial Average gained 65 points, or 0.1%. Technology stocks led the rally, pushing the Nasdaq composite up 1.4% as investors returned to growth-oriented shares.
Market sentiment improved after data showed inflation was lower than economists had expected last month. Although inflation remains above the Federal Reserve’s 2% target at 2.7%, the softer reading suggested price pressures may be easing gradually. This could give policymakers more flexibility to cut interest rates if the job market weakens.
Wall Street’s main indexes closed higher as a soft inflation report fed expectations for interest rate cuts by the Federal Reserve, while chipmaker Micron’s blowout forecast signaled strong AI demand https://t.co/YzrFSYA61m pic.twitter.com/O1osmMvYyh
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Lower interest rates are generally welcomed by Wall Street, as they can stimulate economic activity and support higher asset valuations. However, some analysts cautioned that recent inflation reports have been volatile, partly due to disruptions following a government shutdown. They noted that upcoming data may offer a clearer picture of underlying trends.
Micron Technology was a major driver of gains, with its shares jumping more than 10% after the chipmaker reported better-than-expected quarterly profit and revenue. The company also issued a strong outlook, citing rising demand linked to AI-related products. Its performance helped lift other AI-focused stocks, including Nvidia, Oracle and Broadcom.
Elsewhere, Trump Media & Technology Group surged sharply after announcing a merger move into nuclear fusion technology. Several consumer and industrial stocks also posted gains following earnings updates, though not all results were well received by investors.
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In the bond market, Treasury yields fell following the inflation report, reflecting expectations of easier monetary policy ahead. Overseas, European markets advanced, while Asian markets showed mixed performance. Overall, the session reflected cautious optimism as investors balanced easing inflation against lingering economic uncertainties.