The S&P 500 rose for the first time after four days of declines thanks to inflation data and Micron

The main U.S. index S&P 500 returned to growth after four consecutive days of decline due to the fact that the data on inflation was not as bad as the market expected, writes CNBC. This strengthened investors' hopes for further easing of monetary policy by the Federal Reserve in 2026. Micron's report also gave confidence to the technology sector.

- The S&P 500 broad market index rose 0.79% to 6,774.76 points on December 18.

- The Nasdaq Composite index of the technology sector rose by 1.38%. The main driver of growth were Micron shares, which rose by 10.2% thanks to an optimistic outlook for revenue and profit for the current quarter. Micron showed that demand for AI memory is still growing: this supported the securities of semiconductor and AI companies after the recent decline.

- The blue-chip index Dow Jones Industrial Average rose 0.14%.

The U.S. Department of Labor's delayed Consumer Price Index report for November - the first since the end of the government shutdown - showed annual inflation at 2.7%, while the Dow Jones forecast suggested 3.1%, CNBC writes. Core inflation (excluding food and energy) was 2.6%, while even the most optimistic forecast (from Citigroup) suggested 2.8%.

The report was originally scheduled to be released on December 10, but was postponed due to the longest government shutdown in U.S. history. Also due to the October glitch, the report was missing some standard CPI numbers. Although the lack of October data made economists reluctant to see these numbers as the beginning of a sustained trend of slowing inflation, the market reacted by rising. An additional positive was initial jobless claims, which also came in below forecasts, CNBC reported.

"November's weaker-than-expected inflation data gave the Fed doves a strong argument," Principal Asset Management Investment Director Xi Sha told Bloomberg. - Data distortions can't be ruled out, but such a sharp decline in annual inflation leaves the Fed with little reason to ignore rising unemployment."

"The Fed has said it is in a 'wait and see' mode, and today it was able to see inflation moving in the right direction," Ellen Zentner, chief economist at Morgan Stanley Wealth Management, told Bloomberg. - "Inflation is still above target, but today's data widened the window a bit for additional rate cuts.

The Micron report, for its part, confirmed that "the amount of spending in the next 12 to 18 months on AI is going to be huge," Logan Capital Management lead portfolio manager Chris O'Keefe noted in an interview with CNBC. He believes the winners and losers in the AI race are yet to be determined, but "looking at returns, it's too early to give up on the AI story." "After the recent correction, the potential for individual stocks looks huge," the analyst emphasized.

This article was AI-translated and verified by a human editor