Financial Markets                      12/18 09:28

   

   NEW YORK (AP) -- U.S. stocks are jumping on Thursday following an 
encouraging report on inflation that could help the Federal Reserve keep 
cutting interest rates next year. A strong profit report from Micron Technology 
also helped AI stocks halt their sharp slides, at least for now.

   The S&P 500 rallied 1% and is on track for its best day in three weeks, 
coming off a four-day losing streak. The Dow Jones Industrial Average was up 
315 points, or 0.7%, as of 10 a.m. Eastern time, and the strength for tech 
stocks had the Nasdaq composite up 1.4%.

   Some relief came from a report showing that inflation was less bad last 
month than economists expected. That could soothe nerves at the Fed, which is 
responsible for keeping inflation low and for keeping the job market strong.

   Inflation is of course still higher than anyone would like, at 2.7% last 
month, but if it creeps closer to the Fed's target of 2%, Fed officials could 
feel more free to cut interest rates to help a slowing job market. Wall Street 
loves lower interest rates because they can boost the economy and prices for 
investments, even if they may also worsen inflation.

   To be sure, some along Wall Street said Thursday's inflation update may not 
move the needle much at the Fed given how noisy economic reports have been 
following the U.S. government's earlier shutdown. Next month's update on 
inflation could provide a better gauge of what's actually happening. But a 
better-than-expected report on inflation is nevertheless better than the 
alternative.

   Also helping to drive the U.S. stock market was Micron Technology, the 
seller of memory and storage for computers, which rallied 12.9% after reporting 
stronger profit and revenue for the latest quarter than analysts expected. CEO 
Sanjay Mehrotra said each of the company's business units enjoyed stronger 
revenue and made more in profit off each $1 of that revenue.

   Micron also gave encouraging forecasts for upcoming financial results, and 
Mehrotra credited its position as an "AI enabler," among other things.

   Billions of dollars are flowing into artificial-intelligence technology, 
which helped superstar stocks like Nvidia lead the market for years.

   But questions have been rising about whether those stock prices shot too 
high and whether customers will get a good-enough return on AI investments 
through bigger profits and productivity. Worries are also weighing on companies 
that are borrowing lots of money to pay for investments.

   Oracle and Broadcom have been at the center of such worries recently, and 
their stock prices have been falling sharply since last week even though both 
reported better profits for the latest quarter than analysts expected. On 
Thursday, Oracle rose 2.3%, and Broadcom added 0.8%.

   Nvidia, the chip company that's become Wall Street's most influential 
because of its immense size, gained 1.7%.

   Another winner was Trump Media & Technology Group, which jumped 38.2% to 
carve into some of its steep loss for the year so far, 69.3% coming into the 
day. The company, which began with President Donald Trump's Truth Social 
platform and then moved into cryptocurrencies, financial investments and 
various other lines of business, is now moving into nuclear power.

   It's merging with TAE Technologies in an all-stock deal, where no cash will 
trade hands, and each company will own roughy half of the combined business. 
The companies said the deal would pair TMTG's ability to raise money by 
attracting investors with TAE's technology. They hope to get TAE's 
nuclear-fusion reactors, which would create power in a similar way as the sun 
does, running commercially.

   Cintas rose 3.8% after the provider of work uniforms and cleaning supplies 
reported stronger profit for the latest quarter than analysts expected, while 
also announcing a program to send up to $1 billion to shareholders by buying 
back its own stock.

   Darden Restaurants, the company behind Olive Garden and LongHorn Steakhouse, 
climbed 2.2% even though its profit for the latest quarter fell short of 
analysts' expectations. Its growth in revenue topped forecasts, benefiting from 
both the opening of new restaurants and increased revenue at its older 
locations.

   CarMax swung sharply between gains and losses and was most recently down 1%. 
The auto retailer reported a stronger profit for the latest quarter than 
analysts expected. But it also said it may make less profit from each $1 of 
revenue in sales of used autos during the current quarter, as it tries to get 
more competitive in the market. It also plans to increase spending on marketing 
to drive customers to lots.

   In stock markets abroad, indexes added 0.2% London, 0.4% in France and 0.5% 
in Germany after the Bank of England cut its key interest rate and the European 
Central Bank kept its steady.

   Asian indexes were mixed, with stocks falling 1.5% in South Korea but adding 
0.2% in Shanghai.

   In the bond market, Treasury yields sank following the encouraging report on 
U.S. inflation.

   The yield on the 10-year Treasury fell to 4.11% from 4.16% late Wednesday.

   ___

   AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

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