U.S. stock markets experienced a significant rebound on Thursday, December 18, 2025, fueled by a cooler-than-expected Consumer Price Index (CPI) report and robust earnings from Micron Technology. The technology-heavy Nasdaq Composite led the charge, recovering from previous losses driven by AI trade concerns.
US Stocks Rebound on Favourable CPI Data
The Nasdaq Composite (IXIC) surged 1.4%, or 313.04 points, to close at 23,006.36, propelled by gains in technology stocks. The S&P 500 climbed 0.8%, or 53.33 points, to 6,774.76, breaking a four-day losing streak. The Dow Jones Industrial Average edged up 0.1%, or 65.88 points, to 47,951.85. Investor sentiment was broadly positive as Treasury yields declined following the release of the inflation data.
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The Bureau of Labor Statistics reported that the November CPI rose 2.7% year-over-year, below economists’ expectations of 3%. The core CPI, excluding volatile food and energy prices, increased by 2.6%, also under the anticipated 3%. This data suggests a potential easing of inflationary pressures, increasing the likelihood of the Federal Reserve continuing to lower interest rates.
Micron Technology (MU) reported first-quarter fiscal 2026 earnings of $4.78 per share, surpassing the Zacks Consensus Estimate by 22.25%. The company’s revenues increased by 56.7% year-over-year to $13.64 billion, driven by robust demand for high-bandwidth memory (HBM) products. Shares of Micron jumped 10% following the earnings release.
Micron CEO Sanjay Mehrotra projected continued supply tightness beyond 2026, indicating sustained demand in the AI and data center sectors. As reported by Reuters, Mehrotra stated the company expects “continued supply tightness” due to surging demand.
The market’s reaction to these developments was overwhelmingly positive, reflecting optimism about potential economic growth and favorable monetary policy adjustments. However, some analysts remain cautious, pointing out that the inflation data may have been affected by a recent government shutdown that disrupted data collection. Additionally, while Micron’s earnings are strong, the broader market remains sensitive to potential supply chain issues and geopolitical tensions.
Nasdaq Analyst Summary
Bull Case
- Easing inflation may lead to continued interest rate cuts.
- Strong demand for Micron’s HBM products drives revenue growth.
- Tech sector shows resilience, leading market recovery.
Bear Case
- Inflation data may be distorted by government shutdown.
- Supply chain issues could impact future performance.
- Geopolitical tensions pose a risk to market stability.
The combination of easing inflation and strong corporate earnings has fostered a more optimistic outlook, but the sustainability of this rally will depend on continued economic data and the ability of companies to navigate ongoing global challenges.
