Stocks Rebound on Positive Inflation and Earnings News

US markets are rebounding this morning after President Trump’s speech last night, which focused primarily on the economy, tax refunds, and a Christmas bonus for members of the military. Index futures are up between 0.1% and 0.8%, led by the NASDAQ.

Technology stocks are bouncing back after Micron Technology beat expectations last night ($4.78 vs Street $3.96, up 13.0% premarket). The earnings season effectively wraps up this evening for the year, with results due from Nike and FedEx.

US consumer prices for November came in significantly better than expected (2.7% vs Street 3.1%). Softer inflation gives the Fed scope to continue cutting interest rates in 2026, particularly as the Philadelphia Fed Manufacturing Index was significantly weaker than expected (-10.2 vs Street +3.0).

The Bank of England cut its benchmark rate by 0.25%, as widely expected, though the vote was close at 5-4, with the minority favouring no change. The Pound is up 0.2% on the news, while the Loonie is steady. The European Central Bank held its benchmark rate steady at 2.15%, as expected, and the Euro is down 0.2%. The FTSE is flat, while the DAX is up 0.2%.

Tonight, the Bank of Japan is widely expected to raise its benchmark rate by 0.25% to 0.75%. The Yen is quiet ahead of the decision. Metals are backsliding a bit, with Gold down 0.5% and Silver down 1.0%. Commodity trading is mixed, with Crude Oil up 0.3% and Copper down 0.3%.

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