Wall Street Surges as Inflation Cools and AI Momentum Returns

U.S. markets staged a powerful rebound Thursday, lifted by a cooler‑than‑expected inflation reading and blockbuster earnings from the technology sector. The rally broke a four‑day losing streak and reignited optimism that the Federal Reserve may continue easing interest rates in 2026.

Inflation Relief Sparks Optimism
The latest consumer price index showed annual inflation at 2.7% in November, below forecasts of 3.1%. Core inflation, which strips out food and energy, came in at 2.6%. While still above the Fed’s long‑term target, the softer figures reassured investors that price pressures may be easing. Treasury yields fell in response, signaling confidence that rate cuts could be on the horizon.

The report carried added weight as it was the first inflation update since the government shutdown ended. Economists cautioned that missing October data makes it harder to confirm a lasting trend, but markets welcomed the surprise nonetheless. Jobless claims also came in lower than expected, adding to the sense of resilience in the labor market.

Tech Stocks Lead the Charge

Technology shares were the day’s standout performers. A leading chipmaker reported stronger‑than‑expected profits and issued upbeat guidance, citing surging demand for memory chips used in artificial intelligence systems. Its stock soared more than 12%, sparking gains across the sector.

The rebound spread quickly to other giants: Alphabet, Amazon, Nvidia, Microsoft, Meta, and Tesla all posted solid advances. Even companies that had stumbled earlier in the week, such as Oracle, clawed back ground. The rally underscored how central AI remains to investor sentiment, despite recent volatility.

Corporate Moves and Mergers

Beyond tech, several companies made headlines:
– Trump Media & Technology Group surged more than 30% after announcing a merger with a nuclear‑fusion energy firm. The deal, valued at over $6 billion, aims to combine financial firepower with breakthrough energy technology, with ambitions to bring fusion power closer to commercial reality.
– Lululemon rose sharply after reports that a major investor had built a billion‑dollar stake, fueling speculation about leadership changes and strategic shifts.

– Darden Restaurants, parent of Olive Garden and LongHorn Steakhouse, lifted its revenue outlook for the second straight quarter thanks to strong sales growth.
– Accenture gained after beating earnings expectations, while CarMax fell as it warned of tighter margins in the used‑car market.

Global Market Context

The rally wasn’t confined to the U.S. European stocks advanced after the Bank of England cut interest rates, while Asian markets delivered mixed results, with gains in Shanghai offset by losses in South Korea.

Looking Ahead

Despite Thursday’s surge, questions linger about whether AI stocks can sustain their leadership role. Some analysts warn of stretched valuations and the risk of overenthusiasm. Still, the sheer scale of investment flowing into artificial intelligence suggests the story is far from over.

For now, Wall Street has regained its footing. Cooling inflation, resilient jobs data, and renewed tech momentum combined to deliver the strongest signal in weeks that investors may yet close out the year on a high note.