Trump signs! U.S. stocks surge with the Nasdaq soaring 1.51%, and 24 AI giants respond to the Genesis mission

Eastern Time December 18, Trump signs space policy executive order and promotes the AI Genesis Mission plan, coupled with CPI below expectations. U.S. stock market’s three major indices end four consecutive declines with all closing higher, with the Nasdaq soaring 1.51% in a single day, and tech stocks and chip stocks collectively erupting.

U.S. stocks end four consecutive declines with all closing higher, market sentiment strongly reversed

(Source: Google Finance)

On December 18 (Thursday) Eastern Time, the Dow Jones Industrial Average and the S&P 500 Index ended their previous four-day losing streak, with all three major U.S. stock indices closing higher. At the close, the Dow rose 65.88 points, up 0.14%; the Nasdaq increased 313.04 points, up 1.51%; the S&P 500 gained 53.33 points, up 0.79%.

This rebound ended the market’s prolonged weakness over several days, indicating investor confidence is recovering. The Nasdaq’s leadership shows that tech stocks are once again the focus of market capital, especially driven by artificial intelligence and chips sectors, with growth stocks demonstrating strong rebound momentum.

Market analysts point out that the synchronized rise of the three major indices, with the Nasdaq leading, reflects a clear rebound in risk appetite. After the Federal Reserve’s hawkish rate cut stance triggered market panic, investors are reassessing the resilience of the U.S. economy and the long-term growth potential of tech stocks.

The timing of this rebound is also noteworthy. Before the Christmas holiday, markets often experience a “Christmas rally,” where institutional investors tend to adjust positions and lock in annual gains. This strong rebound may indicate that the market will maintain a relatively optimistic atmosphere until the end of the year.

CPI below expectations boosts market confidence, Fed put options activated

Market attention is focused on the first CPI report covering the U.S. government shutdown period. Data shows that the U.S. November unadjusted CPI increased by 2.7% year-over-year, well below the market expectation of 3.1%; unadjusted core CPI grew 2.6% compared to the same period last year, slowing to the lowest level since 2021, with an expectation of 3%.

This unexpectedly moderate inflation data injects confidence into the market. The potential inflation rate in the U.S. increased in November compared to last year, but the growth rate is the lowest since early 2021, indicating inflationary pressures are continuing to ease.

Fundstrat stated in a report released before Thursday’s data that: “Moderate CPI data further confirms that the Fed is focused on protecting the labor market. This means the Fed’s ‘put’ is now in place. In other words, if the Fed worries about downside risks to the economy, the ‘Fed put’ will drive stock prices higher.”

The logic behind this view is: when inflation is no longer a major threat, the Fed has more room to focus on economic growth and employment. If signs of economic downturn appear, the Fed can more quickly shift to easing policies, providing an implicit safety net for the stock market.

The unexpected decline in CPI data also alleviates market concerns that the Fed might maintain high interest rates into 2025 for a longer period. Although the Fed has conveyed hawkish signals in recent meetings, the actual trend of inflation data will be a key factor in determining future policy paths. If inflation remains moderate, market expectations for rate cuts in 2025 could be reignited.

Trump promotes AI Genesis Mission, 24 tech giants respond collectively

Twenty-four top artificial intelligence companies have agreed to join the U.S. federal government’s “Genesis Mission” plan, a major initiative by the Trump administration to promote AI in scientific discovery and energy projects. Companies such as OpenAI, Microsoft, NVIDIA, Amazon Web Services, and Google have signed memoranda of understanding with the government, with projects involving the Department of Energy or national laboratories, or expressing willingness to participate.

Michael Kratsios, head of the White House Office of Science and Technology Policy, said: “Leveraging cutting-edge AI research will enhance the productivity of American researchers. The ‘Genesis Mission’ will help American scientists automate experiment design, accelerate simulations, and generate predictive models, achieving breakthroughs in energy and other fields.”

The timing of this plan’s launch is intriguing. Since Trump’s return to the White House, his administration has accelerated its strategic layout in AI. “Genesis Mission” is not only a scientific research project but also a strategic move for the U.S. to consolidate its leading position in the global AI race.

On the same day, major tech stocks rose collectively. Tesla surged over 3%, Amazon and Facebook rose over 2%, Google and NVIDIA nearly 2%, Microsoft up over 1%, Apple up 0.13%. This collective rise indicates market optimism about Trump’s AI policies, believing government support will bring more development opportunities to these companies.

Reports suggest Amazon is in talks to invest over $10 billion in OpenAI, while providing Trainium chips and AWS computing resources. This move could push OpenAI’s valuation beyond $500 billion and help Amazon further expand its footprint in generative AI.

Additionally, media reported on Thursday that Elon Musk told all employees at xAI’s San Francisco headquarters last week that if the company successfully navigates the critical development phase over the next two to three years, xAI will beat all competitors in the AI race. This ambitious declaration reflects the fierce competition currently in the AI field.

Chip stocks lead the market: Micron’s earnings beat expectations ignite the sector

Chip stocks are the main driver of this rally. Micron Technology closed up over 10%, becoming the largest gainer among the S&P 500 components. The latest earnings report shows that demand for memory chips is strong, far exceeding market expectations for the first quarter.

Micron projects that the total potential market size for high-bandwidth memory (HBM) chips by 2028 could reach $100 billion, with a compound annual growth rate of 40%. Meanwhile, management raised capital expenditure guidance from $18 billion to $20 billion, showing strong confidence in future demand growth.

Overall, chip stocks rose across the board, with TSMC up nearly 3%, ASML up over 2%, Western Digital up more than 1%, Qualcomm up over 1%, Broadcom up over 1%, and ARM down nearly 1%. This broad rally indicates renewed confidence in the semiconductor industry’s overall outlook.

Morgan Stanley forecasts that chip stocks will remain one of the best-performing sectors in the U.S. stock market next year, releasing a “2026 Preferred Chip Stocks” list, with NVIDIA, Broadcom, and Astera Labs in the top three. The timing of this list’s release is well-timed, providing investors with clear allocation directions.

Micron’s stellar earnings performance confirms that AI-driven chip demand is not just short-term hype but a long-term trend forming. High-bandwidth memory (HBM), as a key component for AI training and inference, is growing far faster than traditional DRAM and NAND, opening new growth space for memory manufacturers like Micron.

Trump signs space policy executive order, aims to return to the Moon by 2028

On December 18 (local time), the White House issued a statement that Trump signed an executive order establishing a vision for “America First” space policy, ensuring the U.S. leads in space exploration, security, and commercial sectors.

The order mandates that Americans return to the Moon by 2028 and establish initial facilities for a permanent lunar outpost before 2030; it also instructs the deployment of nuclear reactors on the Moon and in orbit. The order aims to upgrade launch infrastructure and develop commercial pathways to replace the International Space Station by 2030, stimulating private sector innovation and investment.

Trump’s space policy emphasizes private sector participation, which is a significant boon for commercial space companies like SpaceX and Blue Origin. Tesla rose over 3% on the day, partly reflecting market expectations that Musk’s SpaceX will play a key role in Trump’s space plans.

The order directs the President’s Chief Science and Technology Advisor to coordinate national space policy efforts and instructs federal agencies to implement the policy, including streamlining procurement processes, executing space security strategies, and ensuring adequate human resources to achieve these goals.

The rollout of this space policy demonstrates that the Trump administration is advancing in multiple frontier technology fields simultaneously. From the AI Genesis Mission to lunar exploration plans, Trump aims to promote U.S. leadership in critical technologies through government policies. This “tech nationalism” strategy is reshaping America’s industrial policy landscape.

It’s worth noting that the goal of returning to the Moon by 2028 is highly ambitious. This suggests that within Trump’s possible second term, this historic mission could be accomplished. The clear timeline provides a concrete development expectation for related industry companies and may attract more capital into aerospace and space sectors.

From a broader perspective, the executive order signed by Trump and the promotion of the AI plan form a comprehensive tech strategy: driving an AI revolution on Earth while establishing U.S. leadership in space. This dual-track approach responds to current technological competition and lays out a long-term strategic layout for America’s interests.

Market reactions are strong, showing investor optimism about Trump’s initiatives. Whether it’s the collective rise of tech stocks or the strong performance of chip stocks, the market believes these policies will bring tangible benefits to related industries. Coupled with the CPI data’s surprise decline, the current market is in a rare “policy boost + data friendly” window.