U.S. stocks rose after an encouraging report on inflation that could help the Federal Reserve keep cutting interest rates next year.

Stocks closed higher on Thursday despite paring back some earlier gains after a renewed bid for AI-related names and a notably cooler-than-expected consumer inflation report landed.

Wall Street is optimistic about the stock market going into next year on hopes that lower interest rates will lift growth.

Asian shares were moderately higher and U.S. futures were mixed after the Bank of Japan raised its key policy rate Friday to its highest level in 30 years. It took the benchmark rate to 0.75%, which is still low compared with other major economies.

Among Nvidia, Apple, Alphabet, Microsoft, Amazon, Meta Platforms, and Tesla, there's a differentiated company primed for a forward split in the new year.

By Naomi Rovnick, global markets correspondent. What matters in U.S. and global markets today Wall Street's traditional Santa rally is nowhere to be found as inflation anxiety and geopolitical tensions dominate the market mood.

Wall Street praised Micron's stellar Q1 earnings. Morgan Stanley said the results were among the biggest surprises in the history of the chip sector.

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The November jobs and consumer inflation reports will continue to set expectations for interest rate cuts in 2026.