Dow Jones Today: Stocks Soar After Inflation Data; Dow and S&P 500 End Losing Streaks; Gold Breaks Record

The stock market experienced a significant surge today following the release of encouraging inflation data. The Dow Jones Industrial Average and the S&P 500 both rebounded strongly, ending their four-session losing streaks. Meanwhile, gold prices reached a new record high.

**Cooling Inflation Boosts Market Optimism**

New data revealed a drop in inflation for November, potentially paving the way for the Federal Reserve to consider cutting interest rates. The Bureau of Labor Statistics reported that core inflation within the Consumer Price Index fell to a four-year low. This development could give the Federal Reserve leeway to lower interest rates in the future without sparking further inflation. That said, the reality is a bit more complicated. some experts caution that the recent government shutdown might have skewed the data, making the inflation picture less clear.

Sal Guatieri, a senior economist at BMO Capital Markets, suggested that this decline in inflation could encourage the Federal Reserve to ease monetary policy in 2026.

**S&P 500: Eyes on 8000**

Analysts are weighing the possibilities for the S&P 500 to reach 8000 next year, with many believing that substantial interest rate cuts from the Federal Reserve will be necessary to reach that mark. JPMorgan analysts anticipate the index will close 2026 at 7500, which implies a 10% increase from current levels. They project two quarter-percentage point rate cuts from the Fed next year. More aggressive cuts could lead to an 18% gain, matching the index's year-to-date performance. While AI-linked stocks have boosted valuations, some are concerned about potentially weak annual returns. JPMorgan's base-case outlook suggests another year of double-digit gains is possible, but further gains hinge on the Fed's actions.

**Lululemon in the Spotlight**

Lululemon is drawing attention as activist investor Elliott Investment Management, which has acquired a stake exceeding $1 billion in the retailer, is pushing for Jane Nielsen as the new CEO. Nielsen has a track record of contributing to turnarounds at Ralph Lauren and Coach. Investors seem receptive to this suggestion, as Lululemon shares experienced a rise of over 4%.

**Darden Restaurants' Strong Performance**

Darden Restaurants, the parent company of Olive Garden and LongHorn Steakhouse, saw its stock rise after reporting strong sales figures and a boosted outlook. CEO Rick Cardenas attributed the company's success to focusing on the basics. Same-restaurant sales increased significantly at both Olive Garden and LongHorn Steakhouse.

**Other Notable Movers:**

• FactSet Research Systems (FDS):** The worst-performing stock in the S&P 500 after its fiscal first-quarter results fell short of expectations.
• Eli Lilly (LLY):** Shares rose following positive trial data for its new obesity pill, orforglipron.
• Birkenstock (BIRK):** Shares declined after the company issued weaker-than-expected fiscal year guidance.
• Trump Media & Technology Group (DJT):** Shares soared following a $6 billion merger agreement with TAE Technologies.
• Chipotle Mexican Grill (CMG):** Launched a "high-protein menu" in response to consumer demand.
• Instacart:** Faces scrutiny from the FTC regarding its AI-driven pricing practices.

**Inflation Rates Lower Than Expected**

November's inflation rates came in lower than anticipated, with consumer prices rising 2.7% over the past 12 months. Core inflation, excluding food and energy, increased by 2.6%, the lowest since 2021. This decrease was driven by falling prices for hotel rooms, recreation, and clothing.