[New York Stock Exchange] Stocks Rebound on Easing Inflation and Micron's Surprise Earnings... Nasdaq Up 1.38%

November CPI Rises 2.7%, Showing Signs of Easing
'Fed Put' Expectations Grow Despite Possible Data Distortions
New Unemployment Claims in Line with Expectations
AI Stocks Rebound on Strong Micron Earnings

On December 18 (local time), all three major U.S. stock indexes rebounded and closed higher, just one day after falling due to concerns over artificial intelligence (AI) investments triggered by Oracle. The sharp slowdown in inflation indicators heightened expectations for monetary easing next year, and Micron's strong earnings helped dispel the notion of an AI bubble, leading to a rebound in technology stocks.

On the 17th (local time), traders are working on the trading floor of the New York Stock Exchange (NYSE) in the United States. Photo by Reuters Yonhap News

On this day at the New York Stock Exchange, the blue-chip Dow Jones Industrial Average closed at 47,951.85, up 65.88 points (0.14%) from the previous session. The large-cap S&P 500 Index rose by 53.33 points (0.79%) to 6,774.76, while the tech-heavy Nasdaq Index jumped 313.038 points (1.38%) to finish at 23,006.361.

Easing inflationary pressures boosted investor sentiment. According to the U.S. Department of Labor, the Consumer Price Index (CPI) for November 2025 rose 2.7% year-on-year. This figure is lower than both the market expectation of 3.1% compiled by Dow Jones and the previous reading of 3.0% in September. The October CPI was not released earlier due to the federal government shutdown (temporary work stoppage).

The core CPI, which excludes the volatile food and energy sectors, increased by 2.6% year-on-year. This result is below both the market expectation and the September figure (each at 3.0%), marking the lowest level since early 2021.

However, since data collection was suspended in October due to the federal government shutdown, the November CPI was also released in an incomplete state. As a result, some caution that it is difficult to definitively conclude that the disinflationary trend has begun in earnest. Nevertheless, with the November inflation rate coming in much lower than expected, there are projections that the Federal Reserve (Fed) may strengthen its policy stance of prioritizing labor market stability.

David Waddell, CEO and Chief Investment Strategist at Waddell & Associates, told CNBC, "Overall indicators (including housing costs) appear to have almost returned to pre-COVID-19 levels in terms of growth rates," adding, "While some adjustments may occur, at this point, I believe inflation is under control."

Tom Lee, Head of Research at Fundstrat, stated, "A moderate CPI trend will further reinforce the Fed's focus on protecting the labor market," and added, "This means the 'Fed put' (stock market gains driven by the Fed's accommodative monetary policy) is in effect for the economy." He continued, "If the Fed is concerned about downside risks to the economy, the Fed put will be activated, which could lead to a rise in the stock market."

According to CME FedWatch, the interest rate futures market currently sees the probability of a rate cut in January next year as still below 30%, but the likelihood of a cut in March is being priced in at close to 60%.

Employment indicators also showed stable trends. According to the U.S. Department of Labor, initial jobless claims for the week of December 7-13 totaled 224,000, down from 237,000 the previous week and in line with market expectations. Continuing jobless claims for those receiving benefits for two weeks or more stood at 1,897,000 for the week of November 30 to December 6, which was an increase from the previous week's 1,830,000 but still below the market expectation of 1,930,000.

Additionally, Micron's "surprise earnings" also supported investor sentiment. The previous day, Micron announced that for the first quarter of fiscal year 2026 (September-November 2025), it posted revenue of $13.64 billion and adjusted earnings per share (EPS) of $4.78. Both figures exceeded market expectations ($12.95 billion and $3.95, respectively). The outlook for the second quarter also surpassed market consensus.

Technology stocks, which had plunged the previous day due to reports of Oracle's struggles to attract data center investment and the resulting focus on an AI bubble, rebounded on the back of Micron's strong performance. By stock, Micron soared 10.12% on its robust results. Nvidia rose 1.87%, while Broadcom and AMD gained 1.18% and 1.49%, respectively. Oracle rebounded 0.88% after dropping 5.4% the previous day.

U.S. Treasury yields declined in response to expectations of monetary easing. The yield on the benchmark 10-year Treasury note, a global bond market reference, stood at 4.11%, down 3 basis points (1bp = 0.01 percentage point) from the previous day. The yield on the policy-sensitive 2-year Treasury note was 3.46%, down 2 basis points from the previous session.