US stocks rose on Thursday, eyeing a recovery from Wall Street’s tech-fueled sell-off,as investors digested the easing inflation pressures from the latest reading on consumer prices that could help set expectations for the path of interest rates.
The tech-heavy Nasdaq Composite (^IXIC) led the way up with a gain of nearly 2%, pushed north by a strong earnings report from Micron (MU) after AI trade worries spurred another bruising session for tech on Wednesday. Shares in the benchmark S&P 500 (^GSPC) and the blue chip-heavy Dow Jones Industrial Average (^DJI) rose around 1.3% and 0.9%, respectively.
Headlining the morning was a cooler-than-expected Consumer Price Index (CPI) report, which showed inflation rose 2.7% in November over the prior year and 2.6% on a “core” basis — both figures coming in below economist estimates of 3% and 3.1%, respectively.
As with Tuesday’s monthly jobs report, economists have noted that the inflation data may be less reliable than normal thanks to the US government shutdown. At the same time, the Federal Reserve seems more attentive to cracks in the labor market than to price pressures. On Wednesday, Fed governor Chris Waller signaled support for rate cuts before the release of the CPI update.
On the jobs front, the Department of Labor reported initial jobless claims of 224,000 for the week ended Dec. 13, down 13,000 from the previous week’s figure. But that data has also been subject to significant volatility in the wake of the federal shutdown.
Meanwhile, Wall Street is keeping watch for more signs of tech malaise after Oracle (ORCL) lost key backing for a $10 billion data center project, sending its stock tumbling on Wednesday along with heavyweight names like Nvidia (NVDA) and Broadcom (AVGO).
Elsewhere, Trump Media & Technology Group (DJT, DJTWW) agreed to a $6 billion deal to merge with Tae Technologies, a fusion power group backed by Alphabet (GOOG, GOOGL) and Chevron (CVX). Shares in Trump Media, the home of the Truth Social platform, surged after the announcement, seen as a bet on AI-fueled energy demand.
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‘Absence of data’ in CPI report flashes yellow for further interest rate cuts
UBS: AI story remains intact, could reach $3 trillion in revenue potential by 2030
As momentum behind the AI trade returns to US markets, UBS said there’s more room to run.
“Without taking any single-stock views, we believe the overall AI story remains intact,” UBS Global Wealth Management’s Ulrike Hoffmann-Burchardi wrote in a note to clients. “Demand for AI compute remains strong, and we estimate that the required compute capacity in the coming years could be orders of magnitude greater than today’s installed base.”
Wednesday’s trading session showed that fears about an AI bubble persist, however, as tech stocks led the markets lower after a report from the Financial Times said Oracle’s partner Blue Owl Capital would not back its $10 billion data center.
But UBS’s Hoffmann-Burchardi doesn’t share those concerns. “We do not see evidence of an investment bubble, with company fundamentals in aggregate still robust,” Hoffmann-Burchardi said Thursday morning.
He believes the market could see tremendous growth from here.
“We expect the total addressable market for AI to reach $3.1 trillion in revenue potential by 2030 — a 30% compound annual growth rate over the next five years,” he wrote.
Adding to a positive string of outlooks for the S&P 500 heading into next year, UBS predicts the S&P 500 could reach 7,300 by June next year and 7,700 by the end of 2026, boosted by earnings growth of 10%, looser Fed policy, and the broadening of AI adoption.
“We believe the structural trends of electrification and longevity will also drive equity performance for the long term,” the firm wrote in its note.
BP shares sink on news of surprise CEO change
Shares in British energy major BP plc (BP) shed roughly 2.2% in early trading on Thursday as investors digested the news from Wednesday night that Meg O’Neill, the CEO of Australian oil company Woodside Energy Group (WDS.AX), will replace Murray Auchincloss as the head of BP.
Auchincloss, the embattled CEO whose lasting mark on the company will be a stilted attempt to turn BP back toward fossil fuels after a failed pivot to renewables, is stepping down immediately. Head of trading Carol Howle will run the oil giant until April 1, when O’Neill steps into the top job, BP said in its announcement.
Auchincloss is departing the CEO job after less than two years in the role, marking BP’s fourth chief executive in a little more than four years. The tumultuous period that saw BP swing toward renewables under former CEO Bernard Looney and then swing back toward fossil fuels under Auchincloss, when the renewables pivot failed to produce results.
In a statement shared by BP, Auchincloss said, “When Albert [Manifold] became Chair, I expressed my openness to step down were an appropriate leader identified who could accelerate delivery of bp’s strategy.”
Part of the company’s move back toward fossil fuels was pushed by a pressure campaign from activist investor Elliott Investment Management.
O’Neill, who will be BP’s first female chief executive and the first outsider to helm the company, currently leads Australia’s largest oil company, Woodside. She is leaving that role immediately, according to a statement provided to The New York Times.
She has led growth initiatives for Woodside in the US, including the $1.2 billion acquisition of liquified natural gas (LNG) operator Tellurian.
“[O’Neill’s] proven track record of driving transformation, growth, and disciplined capital allocation makes her the right leader for bp,” BP chair Albert Manifold said in a statement. “Her relentless focus on business improvement and financial discipline gives us high confidence in her ability to shape this great company for its next phase of growth and pursue significant strategic and financial opportunities.”
Jobless claims hold steady
Applications for unemployment benefits dropped for the week ending Dec. 13, the Department of Labor reported on Thursday, after rising the previous week.
The Labor Department reported that initial jobless claims fell by 13,000 to 224,000, while the four-week moving average ticked up slightly to 217,500. Ongoing unemployment claims for the week ending Dec. 6 rose to 1.89 million.
The volatile weekly data comes amid a murky picture for the labor market. On Tuesday, the November jobs report indicated better-than-expected job gains during the month, though the unemployment rate also crept higher.
And after Thursday’s CPI report showing inflation pressures eased in November, bets that the Federal Reserve would cut interest rates again in January rose slightly. Traders now see 26.6% odds of a rate cut next month, compared to 24% a day earlier.
Stocks rise as investors digest a lower-than-expected inflation reading
US stocks rose in the first minutes of trading on Thursday as investors reacted to lower-than-expected inflation readings for the 12 months ended in November.
The tech-heavy Nasdaq Composite (^IXIC) led the rise, ticking up by 1.5% as strong earnings from Micron (MU) buoyed the sector. The S&P 500 (^GSPC) and the blue chip-heavy Dow Jones Industrial Average (^DJI) added 0.8% and 1%, respectively.
Leading the day is a cooler-than-expected Consumer Price Index (CPI) report, which showed inflation rose 2.7% through the 12 months ended in November and 2.6% on a “core” basis, excluding food and energy. Both figures came in below analyst estimates.
In the labor market, the Department of Labor reported initial jobless claims of 224,000 for the week ended Dec. 13, down 13,000 from the previous week’s figure.
Stock market jumps on lower than expected year-over-year inflation
Futures on major stock market indexes jumped to the upside after Consumer Price Index data showed inflation eased over the 12 months ended in November.
The tech-heavy Nasdaq 100 (NQ=F) led the way up, picking up 1.2% or more than 300 points, while futures on the E-Mini S&P 500 (ES=F) and the blue chip-heavy Mini Dow Jones Industrial Average (YM=F) ticked up by 0.8% and 0.5%, respectively.
In the fixed income market, interest rates on 10-year US Treasurys (^TNX) shed around 0.7% in the minutes after the inflation data’s release.
Headline CPI came in below expectations, with a reading of 2.7% surprising to the downside against an expected 3.1%. Similarly, “core CPI,” stripping out the volatile food and energy categories, came in at 2.6% against economists’ expectations of 3%.
Inflation slows down in November as consumer prices rise 2.7% year-on-year
Consumer prices rose 2.7% through the 12 months ended in November, according to data released Thursday morning, keeping US inflation above the Federal Reserve’s target but coming in significantly lower than analyst forecasts.
Stocks on the London blue-chip index FTSE 100 (^FTSE) were flat on Thursday after the Bank of England cut interest rates to their lowest level in nearly three years.
The committee voted 5-4 to cut interest rates by 25 basis points to a rate of 3.75%, citing increased risks to the labor market and the expectation that inflation will fall toward its target more quickly. The four who voted against cutting rates preferred holding rates steady.
The central bank cut rates for the sixth time after the Federal Reserve also opted to lower interest rates last week to a range of 3.5% to 3.75%.
“We still think rates are on a gradual path downward,” BoE governor Andrew Bailey said. “But with every cut we make, how much further we go becomes a closer call.”
The central banks of Sweden and Norway decided to maintain their borrowing rates. The European Central Bank, which is scheduled to announce its decision today, is also expected to leave rates unchanged.
Good morning. Here’s what’s happening today.
Economic data: Initial jobless claims (week ended Dec. 13); Consumer price index (November); Philadelphia Federal Reserve business outlook (December); Kansas City Federal Reserve manufacturing activity, (December)
Earnings calendar: Accenture (ACN), NIKE (NKE), Cintas Corporation (CTAS), FedEx (FDX), HEICO Corporation (HEI), Darden Restaurants (DRI), FactSet Research Systems (FDS), Birkenstock (BIRK), CarMax (KMX), KB Home (KBH), BlackBerry Limited (BB), Scholastic Corporation (SCHL), FuelCell Energy (FCEL)
Here are some of the biggest stories you may have missed overnight and early this morning:
Read more here in the takeaway from today’s Morning Brief.
Trump Media, TAE Technologies to combine in $6B deal
Trump Media & Technology Group stock soared before the bell after announcing that it will combine with TAE Technologies Inc. (TATE.PVT) in an all-stock transaction valued at $6 billion, according to a statement from TAE on Thursday. DJT (DJT) stock rose over 25%% during premarket trading today following the news.
The deal will create the world’s first publicly traded fusion company.
Premarket trending tickers: Maplebear, Coinbase, Birkenstock, and Accenture
Maplebear Inc. (CART) stock fell 6% before the bell on Thursday following the news that rival DoorDash will be partnering with OpenAI to offer a grocery-shopping app within ChatGPT’s platform. Maplebear, which operates under the brand name Instacart, also launched its own app with OpenAI earlier this month.
Coinbase (COIN) stock rose 2% during premarket trading. The crypto exchange announced it will be rolling out stock trading and prediction markets on its app, placing it in direct competition with Robinhood.
Birkenstock (BIRK) stock fell 7% during premarket trading. The German shoemaker reported better-than-expected fourth quarter results but offered a cautious outlook for fiscal 2026, which fell short of analyst estimates.
Accenture (ACN) stock fell more than 3% before the bell today. The company beat Wall Street estimates for first quarter revenue; however, it faces uneven demand from the public sector and government clients.
Elliott said to build a $1 billion-plus stake in Lululemon
Shares of Lululemon (LULU) are rising in premarket after media reports of moves by activist investor Elliott.
Stock bulls have a worryingly long list of 2026 risks to ponder
US stocks will come up against a long list of potential stumbling blocks next year, according to Bloomberg, linked to risks around AI expectations; valuation and concentration; inflation and rates; geopolitics and trade, and a macroeconomic slowdown.
Micron jumps after forecasting blowout earnings on booming AI market
Micron shares jumped in after-hours trading Wednesday after the company forecast second-quarter profit to be nearly double what analysts projected. The results could also once again fortify faith in the AI trade after tech’s latest rocky stretch.
