S&P500 and Nasdaq: Cooler CPI Sparks Rebound in US Stocks; AI Trade Back in Focus Today

S&P 500 Rebounds as Cooler Inflation and Strong Micron Earnings Lift Sentiment

The S&P 500 moved higher in mid-session trading Thursday, positioning the index to break a four-day slide as lighter inflation and strong semiconductor results lifted sentiment. The S&P 500 gained 0.8%, the Nasdaq Composite advanced 1.5%, and the Dow hovered near flat after being up nearly 480 points earlier in the session.

CPI Surprise: Both Headline and Core Miss Hot, Markets Cheer

Headline CPI for November rose 2.7%, below the 3.1% economists expected, while core CPI increased 2.6%, softer than the 3% consensus. Although the release lacked complete data due to delays tied to the government shutdown, traders welcomed the softer readings, especially with jobless claims also beating expectations. The easing inflation backdrop helped counter concerns that had pressured markets earlier in the week.

Nasdaq: 50-Day MA Holds Key to December Surge

Technically, the Nasdaq Composite (IXIC) is trading higher after recovering a pair of 50% levels at 22798.61 and 22959.14. The only obstacle left is the 50-day moving average at $23121.94.

Recovering the 50-day will be a strong sign that buyers have returned. This will create the possibility of a strong year-end rally with near-term objectives 23698.93 and 24019.99.

How Did Economic Data Shape Today’s Market Tone?

The partial CPI snapshot suggested that pricing pressures may be stabilizing into year-end. Some managers cautioned that December data could reintroduce volatility, but the combination of cooler CPI and firm labor data supported a risk-on tone. Equities strengthened throughout the morning as investors recalibrated expectations for a more accommodative rate environment in 2026.

What Powered the Tech Sector’s Comeback?

Tech staged a firm rebound after recent weakness tied to concerns about AI project financing. Micron surged more than 11% after beating fiscal first-quarter expectations and guiding current-quarter revenue to about $18.70 billion, well above the $14.20 billion analysts projected. The upbeat outlook revived confidence in AI-related spending, lifting major chipmakers and mega-cap tech.

Nvidia, AMD, Amazon, Meta, Alphabet, and Microsoft each gained more than 2%, while Tesla climbed nearly 5%. Oracle added 2.2% after Wednesday’s decline, and Palantir rose more than 5%.

Which Stocks Saw the Biggest Midday Moves?

Rocket Lab advanced nearly 8% after completing a Space Force mission ahead of schedule, with AST SpaceMobile and Virgin Galactic rising in sympathy.

GE Vernova gained almost 4% on an upgrade at Jefferies, which pointed to strengthening power-infrastructure demand.

Trump Media jumped 33% after announcing a planned merger with TAE Technologies valued above $6 billion.

Lululemon climbed more than 6% as Elliott Management accumulated a stake exceeding $1 billion.

On the downside, FactSet dropped more than 7% after missing free-cash-flow estimates.

Birkenstock sank 9% on weaker fiscal 2026 guidance.

Lennar slipped more than 2%, extending losses after mixed results and a downgrade at Evercore ISI.

What Are Traders Watching Next?

Thursday’s session delivered a clean reset: softer CPI supported the case for moderating inflation, Micron reignited AI enthusiasm with a strong revenue outlook, and strength across major tech names helped steady the broader indexes. These drivers gave traders a clearer signal that buyers are willing to re-engage after recent pressure.

Looking ahead, traders will monitor upcoming December inflation releases, additional corporate guidance from AI-linked companies, and sector rotation patterns to gauge whether Thursday’s rebound can extend.

With tech leadership returning and economic data easing pressure on future rate expectations, the near-term bias leans mildly bullish, supported by improving breadth and stronger institutional appetite tied to AI catalysts.

More Information in our Economic Calendar.