Updated: 4:15 PM EST | Thursday, December 18, 2025
Wall Street rebounded Thursday as a softer inflation update eased interest-rate pressure and a surge in semiconductor names helped revive the tech trade. The S&P 500 snapped a four-session skid, the Nasdaq Composite led gains, and investors pivoted back toward growth shares after recent volatility tied to AI spending concerns and rate uncertainty. [1]
Market close: S&P 500 ends higher, Nasdaq outperforms
By the closing bell, major indexes finished solidly in the green:
- S&P 500: 6,773.91, +52.48 (+0.78%) [2]
- Nasdaq Composite: 23,004.92, +311.60 (+1.37%) [3]
- Dow Jones Industrial Average: 47,955.33, +69.36 (+0.14%) [4]
The move higher followed an encouraging inflation print and a strong day for chipmakers, with Micron’s upbeat outlookacting as a catalyst for broader AI-linked sentiment. [5]
Inflation and rates: why today’s CPI mattered to stocks
Markets leaned into the view that the Federal Reserve could have more room to ease if inflation continues to cool while the labor market gradually slows.
- The inflation data showed inflation at 2.7% (closer to the Fed’s 2% target), helping push Treasury yields lower. [6]
- The 10-year Treasury yield fell to about 4.11%, a move that tends to support higher-valued growth and technology stocks. [7]
- On the policy outlook, traders priced a 58% probability of a dovish Fed move in March (per CME FedWatch, as cited in market reporting), highlighting how sensitive equities remain to the expected rate path. [8]
Separately, a jobless claims report showed new applications fell last week, reversing the prior week’s jump—another sign the labor market is slowing, but not breaking. [9]
What moved the market: Micron leads chips; deal headlines lift single names
Semiconductors and AI-linked stocks rebound
A large share of Thursday’s momentum came from semiconductors:
- Micron jumped after forecasting quarterly profit well above expectations on strong AI-related demand. [10]
- Other memory-related names—SanDisk and Western Digital—also rallied, and the Philadelphia SE Semiconductor Index climbed. [11]
This bounce comes after a choppier stretch for the AI trade, as investors debate how quickly massive, debt-backed spending on AI infrastructure will translate into sustainable profits. [12]
Consumer and deal news: Lululemon, Trump Media, and more
Thursday also featured several headline-driven movers:
- Lululemon gained after a report that activist investor Elliott built a stake worth more than $1 billion. [13]
- Trump Media & Technology Group surged after announcing an agreement to combine with fusion power company TAE Technologies in an all-stock deal valued at more than $6 billion. [14]
- Oracle rebounded after the previous day’s decline tied to investor concerns about AI-data-center funding plans. [15]
Elsewhere, day-to-day stock leadership remained mixed, with some names rising on earnings and others dropping on company-specific updates (including notable biotech volatility). [16]
After the bell: Nike, FedEx, and KB Home deliver late catalysts
Although U.S. stock trading in the extended session typically ends at 8:00 PM ET, major earnings and guidance released after the close can reshape expectations for the next session—especially in a market still heavily driven by macro headlines and rate pricing.
Nike reports Q2 FY2026 results: revenue edges up, margins pressured by tariffs
Nike reported fiscal 2026 second-quarter results after the close, showing modest top-line growth but margin pressure:
- Revenue: $12.4B, up 1% [17]
- Wholesale revenue: $7.5B, up 8% [18]
- NIKE Direct revenue: $4.6B, down 8% [19]
- Gross margin: 40.6%, down 300 bps (Nike cited higher tariffs in North America as a key factor) [20]
- Diluted EPS: $0.53; Net income: $0.8B, down 32% [21]
Nike’s results keep investors focused on whether the company can rebuild momentum without sacrificing profitability—especially as tariffs and channel mix shifts weigh on margins. [22]
FedEx beats and raises the low end of its outlook
FedEx reported higher quarterly profit and revenue and lifted parts of its outlook, citing pricing actions and cost reductions:
- Adjusted profit: $4.82 per share, up from $4.05 a year earlier [23]
- Full-year (FY ending May 2026) EPS outlook: raised the low end to $17.80–$19.00 [24]
- Revenue growth outlook: now 5%–6% (from 4%–6%) [25]
FedEx’s update is being watched as a read-through on shipping demand and broader economic resilience, particularly into the holiday period. [26]
KB Home posts weaker year-over-year quarter; issues 2026 ranges
Homebuilder KB Home also reported after the close:
- Q4 revenue: $1.69B; Q4 EPS: $1.55 (down year over year) [27]
- Management outlined initial FY2026 ranges including 11,000–12,500 home deliveries and $5.10B–$6.10B in housing revenues (ranges, not guarantees). [28]
With mortgage rates still a swing factor for housing demand, investors often treat homebuilder guidance as an early signal for consumer and rate sensitivity heading into the new year. [29]
Outlook and forecasts: what investors are watching next
Thursday’s rally strengthened a familiar late-year narrative: inflation prints and Fed expectations remain the market’s primary macro levers, while the AI trade continues to drive outsized sector rotations.
Key themes heading into the next session and the year-end stretch:
- Rate-cut expectations vs. inflation reality: A lower CPI reading helped, but markets will remain reactive to any data that changes the perceived timing of Fed easing. [30]
- AI leadership (and the “show me” phase): Micron’s guidance reignited confidence in parts of the AI supply chain, but investors are still debating monetization timelines for large-scale AI infrastructure spending. [31]
- Corporate margin pressure from tariffs: Nike explicitly pointed to tariff impacts on gross margin, reinforcing how policy-driven cost pressures are showing up in earnings discussions. [32]
- Capital markets backdrop: Beyond day-to-day trading, deal and IPO narratives remain active—Nasdaq leadership has pointed to expectations of clearing an IPO backlog into early 2026 as the listing environment improves.
Global markets were comparatively muted earlier in the day, with investors balancing central-bank decisions abroad against U.S. inflation signals—another reminder that cross-asset rate expectations are still the dominant macro driver. [33]
References
1. www.marketscreener.com, 2. www.marketscreener.com, 3. www.marketscreener.com, 4. www.marketscreener.com, 5. apnews.com, 6. apnews.com, 7. apnews.com, 8. www.marketscreener.com, 9. www.marketscreener.com, 10. www.marketscreener.com, 11. www.marketscreener.com, 12. www.marketscreener.com, 13. www.marketscreener.com, 14. www.marketscreener.com, 15. www.marketscreener.com, 16. www.barrons.com, 17. www.businesswire.com, 18. www.businesswire.com, 19. www.businesswire.com, 20. www.businesswire.com, 21. www.businesswire.com, 22. www.businesswire.com, 23. www.marketscreener.com, 24. www.marketscreener.com, 25. www.marketscreener.com, 26. www.marketscreener.com, 27. www.stocktitan.net, 28. www.stocktitan.net, 29. www.stocktitan.net, 30. www.marketscreener.com, 31. www.marketscreener.com, 32. www.businesswire.com, 33. www.reuters.com
