Stock Market Rebounds: Tech and Easing Inflation Lead Thursday Rally
NEW YORK — U.S. equities surged on Thursday, December 18, 2025, as a “Goldilocks” combination of cooling inflation data and a blockbuster earnings report from chipmaker Micron Technology fueled a broad-based recovery. The gains offered a reprieve for Wall Street following a brutal tech sell-off earlier in the week that had been sparked by renewed concerns over AI valuations.
The Numbers: Major Indices Rally
The tech-heavy Nasdaq Composite (^IXIC) led the charge, jumping nearly 2% as semi-conductor stocks found their footing. The S&P 500 (^GSPC) rose approximately 1.3%, while the Dow Jones Industrial Average (^DJI) gained roughly 0.9% (over 450 points).
| Index | Level | Change (%) |
| Nasdaq Composite | 23,122.81 | +1.89% |
| S&P 500 | 6,812.70 | +1.35% |
| Dow Jones Industrial Avg | 48,343.61 | +0.96% |
Inflation Eases: CPI Data Beats Expectations
The primary macro catalyst was the November Consumer Price Index (CPI) report. Despite fears that a recent federal government shutdown might distort data collection, the results showed inflation cooling more than economists anticipated.
- Headline CPI: Rose 2.7% year-over-year, down from 3.0% in September.
- Core CPI: (Excluding volatile food and energy) cooled to 2.6%, beating FactSet consensus estimates of 3.1%.
- Market Impact: The softer-than-expected reading bolstered investor hopes that the Federal Reserve will maintain its path of interest rate cuts into early 2026.
Micron and the “AI Proof Point”
In the corporate sector, Micron Technology (MU) was the undisputed star. Shares of the memory chipmaker skyrocketed over 10% after the company reported blowout first-quarter fiscal 2026 results.
“Our performance underscores the accelerating demand for AI data centers,” said Micron CEO Sanjay Mehrotra.
Micron’s revenue reached a record $13.6 billion, driven by insatiable demand for High Bandwidth Memory (HBM) used in AI accelerators. This “proof point” helped soothe investor anxieties that AI infrastructure spending might be slowing down—a fear that had punished stocks like Nvidia and Oracle in previous sessions.
Tech Giants Ride the Wave
The positive sentiment from Micron rippled through the “Magnificent Seven” and other chip heavyweights:
- Nvidia (NVDA): Up 2.3%
- Alphabet (GOOGL): Up 1.9%
- Infosys (INFY): Up 2.7% (tracking strength in global IT services)
Looking Ahead
While the rally provides a festive boost heading into the final days of 2025, some analysts remain cautious. Experts at Seeking Alpha noted that while the CPI data appears “benign,” underlying risks—such as high fiscal deficits and potential trade tariffs—could resurface in the new year.
For now, investors are embracing the holiday cheer, with the VIX (Volatility Index) dropping over 8%, signaling a significant cooling of market fear.
