CPI Cools to 2.7%, Rate-Cut Bets Reprice

U.S. CPI Falls to 2.7%, Boosting Fed Rate-Cut Odds

Stocks caught a bid after softer inflation, while tech momentum accelerated on Micron’s AI-driven beat. Today’s $7.1T triple-witching expiration is the next volatility catalyst traders can’t ignore.

TL;DR:

📉 CPI cools to 2.7%
🧠 Micron beats, AI trade ignites
🧨 $7.1T triple-witching hits today
🏯 BoJ hikes rate to 0.75%

CPI Cools to 2.7%

November CPI printed 2.7% year-over-year, below expectations, pushing markets to lean harder into 2026 rate-cut pricing. Lower inflation typically supports equity multiples and caps Treasury yields, but the follow-through depends on whether services inflation keeps fading. For traders, the clean read is: softer CPI reduces “higher-for-longer” pressure, and risk assets usually breathe easier. Source

Micron Beats, AI Trade Ignites

Micron delivered a strong earnings beat tied to AI-driven demand, sending the stock up roughly 12% and lifting the broader tech complex. The move reinforced that the market is still paying for “real AI revenue,” not just narratives, with semis acting as the liquidity magnet. If the Nasdaq holds its post-print range, dip buyers likely stay active; if it fades, it signals the rally is still headline-fragile. Source

$7.1T Triple-Witching Hits Today

A record $7.1 trillion in options and futures contracts is set to expire today, a classic setup for sharp, mechanical price swings. These flows can distort intraday moves as dealers hedge, pin key strikes, or unwind exposure—especially in mega-cap names that dominate index gamma. Expect bigger wicks, faster reversals, and more “level-to-level” trading. Source

BoJ Hikes Rate to 0.75%

The Bank of Japan raised its policy rate to 0.75%, its highest level in decades, keeping global rate differentials and yen dynamics in focus. A firmer Japan rate regime can tighten global liquidity at the margin and shift carry-trade behavior, which matters for risk sentiment worldwide. Traders should watch USD/JPY sensitivity and whether global bond yields react to Japan’s higher floor. Source

U.S. CPI Falls to 2.7%, Boosting Fed Rate-Cut Odds