US stock markets moved higher on Thursday. Investors reacted to new inflation data that came in lower than expected. This increased hopes that the Federal Reserve may cut interest rates again next year.
By 09:35 ET, the Dow Jones was up 390 points. That was a rise of 0.8%. The S&P 500 gained 62 points, or 0.9%. The Nasdaq climbed 302 points, rising 1.3%.
The rally followed fresh inflation numbers from the US government. Consumer prices rose less than expected in November.
The Consumer Price Index increased 2.7% compared to a year ago. This was lower than the 3.0% reading seen earlier and below the 3.1% forecast.
Core inflation also slowed. This measure removes food and energy prices. It rose 2.6% year over year. Economists had expected 3.0%.
This was the first inflation report released since the government shutdown ended in mid November. Some data for October was missing because government agencies were not fully operating.
Economists warned the data may not tell the full story. Analysts said the sudden slowdown looked unusual, especially in areas like rent. They said December data will be important to confirm whether inflation is truly cooling or if this was a temporary distortion.
The Federal Reserve cut interest rates by 0.25% last week. While the move was expected, officials remain divided. Several policymakers openly disagreed with the decision or signaled caution about future cuts.
Market mood also improved after Micron Technology posted strong results. The chipmaker beat earnings expectations and gave very bullish guidance for the current quarter.
Micron said demand from AI companies is surging. It expects this trend to continue as more data centers are built.
Micron is a key supplier of high bandwidth memory chips. These are essential for AI processors. Strong AI demand helped offset weak sales in consumer electronics.
Not all stocks moved higher. Instacart shares fell sharply after a report said the company is under investigation by the Federal Trade Commission. The probe is linked to possible price discrimination using artificial intelligence.
Lawmakers have raised concerns after studies showed customers were charged different prices for the same items. Some price gaps reportedly reached as high as 23%.
CarMax shares also declined. The company said it plans to lower margins and increase marketing spending. This came even as quarterly sales beat expectations.
On the positive side, MillerKnoll shares rose after strong earnings and upbeat guidance. Lululemon surged after reports that activist investor Elliott has taken a stake worth over $1 billion.
Oil prices also moved higher. The rise followed a decision by President Donald Trump to block sanctioned oil tankers linked to Venezuela.
Brent crude rose to $60.09 per barrel. US crude climbed to $56.31 per barrel.
Trump said the move targets tankers already under US sanctions. It adds pressure on Venezuela’s government and raises concerns about oil supply.
Despite the daily gain, oil prices are still on track for a weekly decline of nearly 2%. Fears of excess supply and hopes for peace talks in Ukraine continue to weigh on the market.
