US Stock Market Today: Wall Street Rebounds as Cooling Inflation Revives Rate-Cut Expectations

Stocks and bonds advanced after US consumer‑price data indicated inflation is easing. The November consumer price index climbed 2.7% year on year, while core inflation slowed to 2.6%, the slowest pace since early 2021. 

The data boosted hopes for Federal Reserve rate cuts and ended a four‑session slide in equities. The S&P 500 gained close to 1.3%, the NASDAQ 100 rose 1.9%, and the yield on the 10‑year Treasury fell to around 4.11%.

Cooling inflation and rate expectations

Economists said the sharp drop in inflation gives policymakers room to reduce borrowing costs in 2026. Seema Shah of Principal Asset Management argued that the central bank has little excuse not to respond to rising unemployment. Traders now expect two rate cuts next year and anticipate the first by mid‑2026.

Analysts at Morgan Stanley noted that officials are balancing inflation risks against a softening labor market and that the latest data provides scope for a shift toward easier policy. Investors will scrutinize upcoming economic reports to determine whether the disinflation trend persists. Some strategists caution that valuations remain stretched, leaving markets vulnerable if growth disappoints.

Furthermore, the consumer price index (CPI) data suggest that inflationary pressures are easing, offering the Fed a potential reason to cut rates to stimulate the economy. The sharp drop in inflation presents a compelling case for policymakers to respond to rising unemployment, further strengthening the disinflation narrative.

Corporate moves

• Micron forecast: Micron expects second‑quarter profit of about $8.42 per share, far above estimates, as demand for AI‑oriented memory chips allows it to charge higher prices; revenue is projected at roughly $18.7 billion.

• Apple in Japan: To comply with Japan’s new competition law, Apple will allow alternative app stores and cut commissions to as low as 5% on iPhones sold in the country.

• Fusion venture: Trump Media & TAE Technologies plan to merge in a more than $6 billion all‑stock deal, with equal ownership, to build a utility‑scale fusion power plant and supply clean electricity for data centers.

• Darden Restaurants: The Olive Garden parent raised its fiscal 2026 same‑restaurant sales forecast to 3.5% - 4.3% and said it absorbed tariff costs rather than raising menu prices.

• CarMax: The used‑car retailer will accept lower margins and increase advertising spending while cutting $150 million in administrative expenses to win back customers.

• Lululemon & Elliott: Activist investor Elliott Management invested over $1 billion in Lululemon and, alongside former Ralph Lauren executive Jane Nielsen, is pressuring the athleisure company to refresh products and improve operations.

• Coinbase diversification: Coinbase will allow customers to trade stocks and event contracts tied to sports, politics, and financial outcomes and plans to offer tokenized stocks for 24/7 trading.

• SoFi stablecoin: SoFi intends to let clients trade numerous cryptocurrencies and develop its own US‑dollar‑backed stablecoin, integrating digital assets with its lending services.

The confluence of easing inflation and a busy corporate news cycle lifted market sentiment. Investors remain alert to economic data releases and corporate updates as they gauge the trajectory of monetary policy and corporate earnings.

Also Read: US Stock Market Today: S&P 500 and Dow Jones Dip 0.5% as NASDAQ Proposes 23-Hour Trading