Wall Street’s main indexes closed higher on Thursday (Friday AEDT), buoyed by a recovery in rate-sensitive technology stocks as a softer-than-expected inflation report that reinforced expectations for interest rate cuts by the Federal Reserve.
The Dow Jones Industrial Average added 65.9 points, or 0.1%, to close at 47,951.9. The S&P 500 gained 53.3 points, or 0.8%, to 6,774.8, while the Nasdaq Composite climbed 313.0 points, or 1.4%, to 23,006.4.
The gains followed a consumer price index (CPI) report showing that consumer prices rose less than expected in the year to November.
However, the Bureau of Labor Statistics did not publish month-to-month CPI changes after a 43-day government shutdown prevented the collection of October data, prompting some caution among economists.
Labour market data also supported sentiment. Weekly jobless claims fell last week, reversing a surge in the prior week and signalling that labour market conditions remained stable in December.
Earlier in the week, an official jobs report showed U.S. job growth rebounded in November, while the unemployment rate edged up to 4.6%.
Market pricing now implies a 46.8% chance of a dovish policy move by the Federal Reserve in March, according to CME Group FedWatch Tool.
In corporate news, Lululemon shares rose 3.5% following reports that activist investor Elliott had acquired a stake of more than US$1 billion in the athletic apparel maker.
Technology stocks led the broader market higher. Micron Technology surged 10.2% after forecasting quarterly profit at nearly double analysts’ expectations, citing strong demand linked to artificial intelligence.
Trump Media & Technology jumped 41.9% after announcing it had agreed to combine with fusion power company TAE Technologies in an all-stock deal valued at more than US$6 billion.
On the bond markets, U.S. Treasury yields moved lower, with both the 10-year and 2-year yields down 0.7% to 4.124% and 3.462%, respectively.
