The stock market experienced a significant relief rally on Thursday, buoyed by a more favorable-than-anticipated inflation report and a surge in technology stocks driven by strong earnings and positive guidance related to artificial intelligence.

The latest Consumer Price Index (CPI) data revealed that core inflation, which excludes volatile food and energy prices, has cooled to its lowest point since early 2021. The Bureau of Labor Statistics reported an annual inflation rate of 2.7% through November, with a 0.2% increase from September to November, both figures surpassing market expectations.

Economists noted that the moderation in inflation is a welcome sign for purchasing power and consumer demand. Bill Adams, Chief Economist at Comerica Bank, highlighted that the slower rise in the average of consumer prices will ultimately benefit households. He also suggested that the Federal Reserve would likely be encouraged by the downward trend, particularly the multi-year low in core CPI.

This positive inflation news, coupled with renewed optimism in the technology sector, fueled a broader market upturn. Major tech giants, including Amazon.com, Nvidia, and Microsoft, saw notable gains, reflecting investor confidence in companies at the forefront of the AI revolution. Consumer discretionary stocks also performed strongly, with Lululemon Athletica leading the pack.

The positive sentiment extended to semiconductor stocks, with Micron Technology delivering an exceptional earnings report. The company surpassed expectations for its fiscal first quarter and provided a robust outlook for the second quarter, sending its stock soaring. Analysts reiterated their positive ratings and raised price targets, citing significant upside potential.

In a separate development, Trump Media & Technology Group announced a $6 billion all-stock merger with TAE Technologies, a privately held fusion power company. This transaction aims to create one of the first publicly traded fusion companies, combining Trump Media’s access to capital with TAE’s advanced fusion technology. The combined entity plans to construct a utility-scale fusion power plant, signaling ambitions in the burgeoning nuclear energy sector.

The merger is positioned to capitalize on the growing demand for clean and abundant energy, which proponents believe will be crucial for maintaining global economic dominance and supporting technological advancements like AI. The deal underscores a growing interest in innovative energy solutions and their potential market impact.

The Nasdaq Composite surged 1.4%, the Dow Jones Industrial Average ended a four-session losing streak with a 0.1% gain, and the S&P 500 also reversed its recent decline, adding 0.8%. These movements reflect a broad-based market recovery driven by encouraging economic data and sector-specific catalysts.

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Keywords: stock market rally, cooler inflation, consumer price index, core inflation, AI stocks, Nvidia earnings, Micron Technology, fusion power