Inflation Eases, Tech Soars

Fresh news and strategies for traders. SPY Trader episode #1462. The market staged a powerful latesession reversal, driven primarily by the November CPI report showing core inflation easing to 2.6%, fueling hopes for future Fed rate cuts. This dovish outlook spurred a narrow, riskon rally concentrated in Technology, led by strong earnings from Micron, though companyspecific risks were evident as Nike projected a sales decline.

Episode Transcript

(00:00):
Welcome back to Spy Trader !
I'm your host , Cash Flow Carl , here to break down the moves that mattered in the market this week .
It's 5 am on Saturday , December 20th , 2025 , Pacific time , and while the trading floor is quiet , the data is loud .
This was a week defined by a powerful latesession reversal that erased earlier losses and put risk back on the table .

(00:26):
The S&P 500 ended the period barely positive , up 0.1% for the week , snapping a foursession losing streak with a strong Friday finish .
The Dow Jones lagged , down 0.7% , but the clear leader was the Nasdaq Composite , rising 0.5% for the week and soaring 1.3% in the last session alone .

This rally was fundamentally driven by two key factors (00:49):
cooling inflation and scorching tech earnings .
The primary catalyst was the November CPI report .
Headline CPI fell to 2.7% , and , perhaps more importantly , core CPI eased to 2.6% , its slowest pace since 2021 .

(01:12):
This inflation surprise was the green light the market was looking for , fueling hopes for future Federal Reserve rate cuts and pushing riskon sentiment through the roof .
Adding to the dovish outlook , wage growth moderated to 3.5% , a low not seen since 2021 , suggesting the labor market is softening just enough to support easing without signaling a sharp recession .

(01:36):
Now , let's look at where the money went .
The market rebound was narrowly focused , centered almost entirely on Technology leadership .
The Technology Select Sector SPDR Fund , XLK , and the techheavy Invesco QQQ Trust were the primary drivers .
This tech surge was validated by earnings .

(01:58):
Memory chipmaker Micron Technology saw its shares surge a massive 17% over two days after its earnings report significantly exceeded analyst estimates , reinforcing optimism in the AI hardware cycle .
This immediately lifted key AIexposed chip stocks like NVIDIA and Advanced Micro Devices .

(02:20):
We also saw Oracle rise on news of a joint venture that could give it and other American investors a controlling stake in TikTok’s US operations .
But the week wasn't universally positive .

The Consumer Discretionary sector saw specific microlevel risk impact a major component (02:33):
Nike shares dropped more than 10% after the sneaker giant projected a sales decline , citing economic headwinds in China .
This highlights that while macro news is positive , companyspecific risks are still very real .

(02:55):
Our core market thesis remains constructive , with a bias toward riskon assets .
We are seeing a