Soft Inflation Sparks U.S. Stock Rebound

Risk bounced after softer inflation data, with AI-linked semis leading on Micron’s bullish outlook. Traders also had to price a Fed path that still signals fewer cuts in 2025.

TL;DR:

• 📉 U.S. stocks rebound on soft inflation
• 🧠 Micron guidance powers AI demand trade
• 🏦 Fed signals fewer 2025 rate cuts

U.S. Stocks Rebound on Soft Inflation Data

U.S. equities rebounded Thursday and snapped a four-day losing streak after softer inflation data supported the idea that rate cuts could re-enter the 2026 conversation. The immediate read-through was lower pressure on real yields, giving multiples room to expand and lifting broad risk. The key for traders is whether the bounce holds above prior breakdown levels or fades into another sell-the-rally tape. Source

Micron’s Strong Guidance Boosts the AI Demand Outlook

Micron’s outlook came in hot, reinforcing that AI infrastructure demand is still translating into real revenue expectations across the semi complex. That bid helped tech leadership reassert itself, a familiar pattern when the market wants liquidity and duration exposure. Watch for follow-through in semis versus broader indices; if semis lead, risk appetite is real, if they stall, it’s just relief. Source

Federal Reserve Forecasts Fewer Rate Cuts in 2025

The Fed’s updated outlook pointed to fewer rate cuts in 2025 than previously projected, a reminder that policy easing isn’t a straight line. That message tends to keep the front end sensitive and can cap equity upside when positioning gets crowded. In practical terms, it raises the bar for “bad news is good news” rallies and keeps downside hedges relevant into year-end liquidity. Source