S&P 500 Rises on Easing US Inflation Data, Upbeat Tech Outlook

Traders work on the floor of the American Stock Exchange (AMEX) at the New York Stock Exchange (NYSE) in New York, US, on Monday, Dec. 15, 2025. The last full trading week of 2025 started with stocks falling and bonds rising as Wall Street geared up for key economic data that will help shape the Federal Reserve rate outlook. Photographer: Michael Nagle/Bloomberg Photo by Michael Nagle /Bloomberg

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(Bloomberg) — Stocks advanced on Thursday as a cooler-than-expected inflation report lifted hopes that the Federal Reserve would cut interest rates further. An optimistic outlook in the tech sector also boosted sentiment. 

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The S&P 500 Index pared gains to 1% as of 12:43 p.m. in New York Thursday, but is still on pace to snap a four-day losing streak. Consumer discretionary was the top-performing of 11 sectors in the market, while energy fell along with crude oil prices. Micron Technology Inc. was the top-performing stock in the benchmark after providing an upbeat forecast, citing the ability to charge more for products given rising demand and supply shortages.

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The tech-heavy Nasdaq 100 Index was up 1.8%, rebounding after its biggest daily drop in a month, while the blue-chip Dow Jones Industrial Average, which briefly turned red, was up 0.4%.

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“The earnings engine in the US is on,” said Emily Roland, co-chief investment strategist at Manulife John Hancock Investments, in a Bloomberg TV interview. She’s looking for earnings growth outside of tech for 2026, after being overweight the sector for much of 2025. 

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“We still like tech, but there’s no doubt about it, it’s expensive,” she added.

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The lofty valuations of AI stocks continue to concern investors. About 57% of participants in a Deutsche Bank survey said a potential plunge in AI valuations is the biggest risk to market stability in 2026. Separately, JPMorgan Chase & Co. warned of “extreme crowding” in speculative stocks, including a handful of AI-linked names.

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Thursday’s market move follows a cooler-than-expected inflation report. The core consumer price index rose 2.6% in November, according to the Bureau of Labor Statistics — well below expectations for a 3.1% gain. Traders also focused on jobless claims data, which showed continuing claims rising to 1.9 million. 

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“Today’s CPI print gives the market what it needed: confirmation that disinflation is durable and policy relief is coming,” said Gina Bolvin, president of Bolvin Wealth Management Group. “For investors, this is the time to lean into growth with guardrails — be selective, be strategic, and stay ahead of the curve.”

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US President Donald Trump said in a televised address Wednesday night that he would soon pick a new Fed chair that would bring rates down significantly further as he sought to calm concerns about the high cost of living.

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“A Santa Rally could still be in the cards,” said David Russell, global head of market strategy at TradeStation. 

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Still ahead, FedEx Corp. and Nike Inc. are set to report earnings after the closing bell Thursday. Traders will also parse existing home sales data and a University of Michigan survey of inflation expectations, which are expected Friday morning, for additional clues on the central bank’s rate path.

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