Stocks Rebound On Cooling Inflation, Micron Rescues AI Stocks: This Week On Wall Street

The stock market ended a volatile week with gains, lifted by easing inflation and upbeat corporate results, even as rising unemployment and fragile consumer sentiment raised fresh doubts about the economy’s strength in the fourth quarter.

Major indexes regained footing by Friday, after stumbling early in the week amid tech-sector volatility and growth fears.

The catalyst was a softer-than-expected November inflation report and robust earnings from Micron Technology Inc. (NASDAQ:MU), which revived optimism around artificial intelligence investment.

Labor Market Cracks, Inflation Falls But Data Quality Is An Issue

The unemployment rate climbed to 4.6% in November, up from 4.4% in September, marking the highest level in over four years.

Job losses were concentrated in government roles, especially in October, while the private sector continued to see employment growth, albeit at a slow pace.

Economists cautioned that recent data should be interpreted carefully, as a 43-day federal government shutdown disrupted household data collection, potentially distorting employment figures.

See Also: Jobs Data Leaves Economists Split — Is Labor Market Just Cooling Or Cracking?

The November consumer price index showed annual inflation easing to 2.7%, below expectations. While the trend was favorable, experts warn that data gaps from the shutdown limit confidence in the precision of the report.

Investors increasingly expect the Federal Reserve to pause. After three consecutive interest rate cuts, traders assigned roughly a 75% probability that policymakers will keep rates unchanged at their first meeting of 2026 in late January, between 3.5% and 3.75%.

On the consumer front, the broader confidence remains depressed. The University of Michigan lowered its December consumer sentiment index from the preliminary reading, keeping confidence near historic lows. While inflation expectations have moderated, they remain elevated by long-term standards.

Corporate earnings added important context to the week's market moves. Micron Technology delivered results well above analysts' expectations, driven by strong demand for memory chips used in artificial intelligence data centers. The upbeat outlook sent the stock sharply higher and reinforced confidence around AI-related capital spending.

Nike Inc. (NYSE:NKE) exceeded profit estimates but saw its shares fall as investors focused on weaker margins and slowing sales in China.

FedEx Corp. (NYSE:FDX) also reported better-than-expected results, while Carnival Corp. (NYSE:CCL) stood out with strong earnings, record revenue for 2025 and the reinstatement of its dividend, signaling confidence in the cruise industry's recovery.

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