The Dow Jones Industrial Average climbed Thursday as fresh inflation data came in cooler than expected, bolstering expectations that the Federal Reserve may ease monetary policy later this year. The data reinforced a pattern of moderating price pressures, lifting broader equity markets. The Dow's advance was accompanied by gains across the wider market.
Cooling inflation reduces the urgency for the Fed to maintain its current restrictive stance. Market participants now see a greater likelihood of rate cuts in the coming months, a shift that tends to support equity valuations broadly. This macro backdrop, along with strong earnings from a key AI supply chain player, has supported the Dow's upward momentum.
In a separate company-driven rally, Aehr Test Systems shares surged about 40% after the company reported strong quarterly earnings that underscored robust demand for its semiconductor testing equipment in the artificial intelligence supply chain. The stock jumped 40%, and an AI sentiment score reached 82 out of 100, indicating a strongly bullish market view.
The company disclosed an effective backlog of $100 million, a substantial portion of which is tied to orders expected to ship within its fiscal year 2026 and into the estimated target year 2027. The backlog highlights sustained demand from chipmakers investing in AI infrastructure, as Aehr's specialized test and burn-in systems are essential for validating advanced semiconductors used in AI workloads.