US close: Stocks jump as inflation unexpectedly eases

(Sharecast News) - US stocks finished firmly higher on Thursday, with the Dow and S&P 500 snapping a four-day losing streak and the Nasdaq posting impressive gains, after inflation data showed an unexpected softening of price pressures in November.

"Investors are certainly keen to see data that supports the argument that the Fed will keep cutting next year, and today's figures fit that nicely, but there is the risk that uncertainty around price trends will lean against hopes of more cuts next year," said Chris Beauchamp, chief market analyst at IG.

"Stocks have reacted enthusiastically - having had their rally spoiled yesterday because of Oracle, they seem unlikely to stop for some quibbles around inflation data."

The Dow rose just 0.1%, while the S&P 500 gained 0.8%. However, the Nasdaq jumped 1.4% after having slumped to a four-week low the previous session.

The US consumer price index rose at a year-on-year rate of 2.7% in November, down from 3% in September to 2.7% - with October's figures unavailable due to the Federal government shutdown. This was much lower than the consensus forecast of 3.1% and the lowest rate since July. Core inflation stood at 2.6%, which strips out volatile food and energy prices, was also below consensus expectations of 3%.

Today's CPI reading marked the first consumer inflation report to be published since the shutdown ended back last month. However, in an emailed note following the release, analysts at TD Securities recommended investors not to get their hopes up just yet that inflation was on a sustainable path downwards.

"We would advise market participants to look through the November report's dovish signal, and wait for what's likely to be more reliable December numbers. We think Fed officials will probably aim to do the same," they said.

In other macro news, initial jobless claims fell by 13,000 last week to a seasonally adjusted reading of 224,000, down from the prior week's upwardly revised reading of 237,000 and just below market forecasts of 225,000. Continuing claims, on the other hand, rose to 1.89m from a downwardly revised 1.83m, though they were below forecasts of 1.93m, while the four week moving average, which aims to strip out week-to-week volatility, increased by 500 to 217,500.

Meanwhile, the Philadelphia Federal Reserve's manufacturing index dropped 8.5 points to 10.2 in December, down from 1.7 in November and below consensus expectations for a more modest decline to 3.1.

Market movers

Shares in Donald Trump's media and tech company Trump Media & Technology Group surged more than 40% on the news that it is to merge with US private fusion energy firm TAE in an all-stock deal worth $6bn. The proposed deal, which will create one of the world's first publicly traded fusion companies, has been designed to use TMTG's strong balance sheet to accelerate the rollout of TAE's technologies, providing $200m in cash upfront and an additional $100m upon completion.

Birkenstock plunged 11% despite the German sandal maker topping its full-year targets, as the company warned of lower profit margins over the coming year. The adjusted EBITDA margin for FY26 is expected to be 30.0-30.5%, down from 31.8% for the year just gone, with the expected decline due to a 100-basis point headwind from FX movements and a 100bp impact from US trade tariffs.

Olive Garden parent company Darden Restaurants was 2% higher after reporting that sales increased 7.3% to $3.1bn in the three months ended 23 November, fuelled by a blended same-restaurant sales increase of 4.3% and sales from 30 net new restaurants.

Professional services firm Accenture was down 1% despite posting first-quarter earnings and revenues ahead of consensus forecasts, with analysts citing disappointing guidance for the current quarter.

Dow Jones - Risers

Merck & Co. Inc. (MRK) $100.69 1.52%

Microsoft Corp. (MSFT) $483.98 1.36%

Walt Disney Co. (DIS) $111.87 1.12%

Boeing Co. (BA) $208.27 0.94%

Travelers Company Inc. (TRV) $293.43 0.82%

Caterpillar Inc. (CAT) $565.83 0.70%

Visa Inc. (V) $346.58 0.46%

Goldman Sachs Group Inc. (GS) $876.30 0.46%

McDonald's Corp. (MCD) $319.65 0.30%

Walmart Inc. (WMT) $113.56 0.00%

Dow Jones - Fallers

Intel Corp. (INTC) $36.28 -3.82%

Procter & Gamble Co. (PG) $145.52 -1.55%

Cisco Systems Inc. (CSCO) $76.95 -1.38%

Chevron Corp. (CVX) $147.59 -1.22%

Apple Inc. (AAPL) $272.19 -1.16%

Verizon Communications Inc. (VZ) $40.41 -1.15%

Unitedhealth Group Inc. (UNH) $328.14 -1.05%

Johnson & Johnson (JNJ) $208.70 -0.96%

Amgen Inc. (AMGN) $324.42 -0.95%

International Business Machines Corporation (CDI) (IBM) $300.45 -0.95%

S&P 500 - Risers

Under Armour, Inc. (UA) $4.36 5.31%

Micron Technology Inc. (MU) $248.55 5.30%

Starbucks Corp. (SBUX) $89.42 4.61%

Albemarle Corp. (ALB) $140.33 4.28%

Under Armour Inc. Class A (UAA) $4.54 3.89%

CH Robinson Worldwide Inc (CHRW) $165.09 3.83%

NRG Energy Inc. (NRG) $154.64 3.45%

General Electric Co. (GE) $301.69 3.25%

Celanese Corp. (CE) $42.90 3.22%

Hasbro Inc (HAS) $82.03 3.03%

S&P 500 - Fallers

Nektar Therapeutics (NKTR) $44.00 -11.92%

TripAdvisor Inc. (TRIP) $14.10 -6.00%

Advanced Micro Devices Inc. (AMD) $201.06 -4.72%

Carmax Inc. (KMX) $39.34 -4.21%

HP Inc (HPQ) $23.41 -4.01%

Intel Corp. (INTC) $36.28 -3.82%

Marathon Petroleum Corporation (MPC) $168.11 -3.66%

Advance Auto Parts (AAP) $41.35 -3.58%

Lennar Corp. Class A (LEN) $108.33 -3.48%

Microchip Technology Inc. (MCHP) $64.06 -3.44%

Nasdaq 100 - Risers

Micron Technology Inc. (MU) $248.55 5.30%

Starbucks Corp. (SBUX) $89.42 4.61%

Hasbro Inc (HAS) $82.03 3.03%

Gilead Sciences Inc. (GILD) $121.47 2.22%

Comcast Corp. (CMCSA) $30.27 2.04%

Adobe Systems Inc. (ADBE) $355.81 1.77%

eBay Inc. (EBAY) $83.64 1.57%

Autodesk Inc. (ADSK) $299.24 1.49%

Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $594.09 1.43%

Microsoft Corp. (MSFT) $483.98 1.36%

Nasdaq 100 - Fallers

Intel Corp. (INTC) $36.28 -3.82%

Microchip Technology Inc. (MCHP) $64.06 -3.44%

Dollar Tree Inc (DLTR) $126.86 -3.43%

Broadcom Inc. (AVGO) $329.88 -3.31%

Paypal Holdings Inc (PYPL) $59.44 -3.04%

Western Digital Corp. (WDC) $175.01 -2.77%

Skyworks Solutions Inc. (SWKS) $64.49 -2.44%

Netflix Inc. (NFLX) $94.00 -2.44%

Asml Holdings N.V. (ASML) $1,036.31 -2.42%

Liberty Global plc Series C (LBTYK) $10.81 -2.31%