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The Dow Jones fell 400 points from the highs of the day, even slipping into negative territory at one point during the session, but managed to close with gains of over 60 points. The S&P 500 and Nasdaq also cooled from their respective highs, but ended with gains of over 1% each.
A rally in shares of Micron continued to reaffirm the point that the recent AI-linked sell-off is due to company specific issues and not an industry-wide contagion.
Inflation for the month of November was better than expected, with CPI rising 2.7% year-on-year, better than the 3.1% estimates, while Core CPI, which excludes food and energy prices, rose 2.6% from last year, also better than the 3% estimate. Economists do not read much into the data as they believe most of the data collection points were missing due to the shutdown and lay more emphasis on the December print, which will be released next month.
While the CPI print did nothing to boost rate cut odds for January, as they remained between 25% to 27%, it did increase chances of the central bank to ease in March 2026, with the odds rising to 58.5% from 55% earlier.
In other news, TikTok announced that its parent has signed binding agreements with Oracle Corp., Silver Lake, and MGX to create a US joint venture company, which will be called TikTok USDS Joint Venture LLC. Oracle Corp. shares jumped as much as 5% in extended trading, after the announcement.
All eyes today will be on the Bank of Japan and the odds are that the central bank will raise rates to the highest level since 1995 to cool inflation, which has been above their target range for 42 months in a row.
With the year drawing to a close, trading volumes are set to thin out, and markets will also have a truncated upcoming week due to an early close on December 24 and Christmas holiday on December 25.
