US sharemarkets rebounded strongly overnight, snapping a four-day losing streak as softer-than-expected inflation data revived expectations for lower interest rates and strong earnings guidance reignited appetite for growth stocks.
The S&P 500 rose 0.79% to close at 6,774.76, while the Nasdaq Composite gained 1.38% to 23,006.36. The Dow Jones Industrial Average added 65.88 points, or 0.14%, to finish at 47,951.85.
Gains accelerated through the session as investors digested both the inflation data and a resurgence in large-cap technology names.
Inflation data revives rate-cut expectations
Markets were buoyed by the delayed November US consumer price index, the first inflation reading released since the end of last month’s government shutdown.
Headline inflation rose 2.7% over the year, below expectations of 3.1%. Core inflation, which strips out food and energy, eased to 2.6%, also under forecasts.
The report was delayed due to the shutdown and did not include all the usual comparison data points, following the cancellation of the October CPI release. As a result, economists cautioned against reading the figures as the start of a sustained disinflation trend, particularly given lingering questions around housing-related calculations.
Even so, markets responded positively, with additional support coming from initial jobless claims, which also came in below expectations.
Micron reignites the AI trade
Technology stocks led the rally, with Micron Technology standing out after issuing strong revenue guidance for the current quarter. The stock jumped around 10%, helping to stabilise sentiment across the broader artificial intelligence complex, which has faced pressure in recent sessions.
The result reinforced expectations that data centre and semiconductor spending linked to AI development remains robust, despite recent volatility across mega-cap technology stocks.
Tesla also advanced, leading gains among the seven largest US tech names.
Sector performance shows growth rotation
Growth-oriented sectors drove the S&P 500 higher, with consumer discretionary stocks rising around 2% and information technology up more than 1%.
In contrast, financials, consumer staples, energy and real estate underperformed, reflecting a renewed rotation back toward higher-growth areas of the market after a period of relative underperformance.
Australian market
Australian shares are set to open higher, taking their lead from Wall Street. ASX 200 futures are pointing up 47 points, or 0.55%, to 8,615.
In the region, attention turns to New Zealand, with November trade balance data due later today, alongside ANZ’s December consumer confidence report and business survey.
Globally, focus is also shifting to the Bank of Japan, with its upcoming policy meeting closely watched for signals on the future direction of monetary policy.
