GLOBAL MARKETS-Stocks rise, Treasury yields fall as US inflation softens

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Stocks rise on sunnier tech sentiment

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US CPI report for November softer than expected

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BoE cuts rates, ECB stays put

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Oil rises with Treasury prices

By Sin?ad Carew and Amanda Cooper

NEW YORK/ LONDON, Dec 18 (Reuters) - Global shares rose on Thursday and Treasury yields dipped after soft U.S. inflation data raised investors' hopes about more Federal Reserve rate cuts, while Micron's results helped to stabilise "rollercoaster" sentiment around AI stocks.

U.S. consumer prices increased less than expected in the year to November, with the U.S. Consumer Price Index rising 2.7% year-on-year versus economists' forecast of 3.1%, leading to some choppy trading in the dollar as investors also digested updates from UK and European policymakers.

After Wednesday's technology stocks sell-off on worries about AI-inflated valuations, chipmaker Micron's blowout forecast provided some reassurance, sending the heavyweight U.S. tech sector higher.

Garrett Melson, portfolio strategist, Natixis Investment Managers, said Micron's news was "helping to at least stabilise some of the sentiment around AI, which has been a rollercoaster."

"It's this kind of back and forth between skepticism and real confidence. Today we're back on the confidence side of things," he said.

The strategist also pointed to signs of easing inflation and suggested that if December's numbers follow suit, a January rate cut by the Fed could be possible.

"It was a huge downside surprise, softer than even the softest expectations," Melson said. "There is rightly some skepticism in the market to read too much into that given all the noise and volatility through the shutdown.... But, at the margin it still is a downside surprise, and lower is better."

The Fed, which has been balancing labour market weakness with still elevated inflation, has signalled only one rate cut next year but traders have been betting on two.

U.S. President Donald Trump said late on Wednesday the next Fed chair, replacing Jerome Powell in May, would be someone who believed in lowering rates "by a lot."

And Fed Governor Christopher Waller, seen as a Fed chair candidate, said earlier on Wednesday that the central bank had room to cut rates given signs of labour market weakness.

On Wall Street at 12:09 p.m., the Dow Jones Industrial Average rose 146.04 points, or 0.31%, to 48,036.60, the S&P 500 rose 58.84 points, or 0.88%, to 6,780.61 and the Nasdaq Composite rose 327.28 points, or 1.44%, to 23,020.83.

MSCI's gauge of stocks across the globe rose 6.61 points, or 0.66%, to 1,001.66, while the pan-European STOXX 600 index rose 0.96%.

In currencies, the dollar index went from red to green as investors digested the data.

Sterling weakened 0.04% to $1.3371 after the Bank of England cut interest rates but signalled limited scope for further easing.

The euro was down 0.15% at $1.1721 after the European Central Bank kept euro zone rates unchanged as expected and struck a more upbeat tone on the economy.

The Bank of Japan is expected to hike rates on Friday, though traders remain uncertain about the pace of tightening in 2026.

The dollar index, which measures the dollar against a basket of currencies, including the yen and the euro, rose 0.09% to 98.46. Against the Japanese yen, the dollar weakened 0.04% to 155.6.

U.S. Treasury yields fell after the consumer price data, with benchmark U.S. 10-year notes falling 3.1 basis points to yield 4.12%, from 4.151% late on Wednesday.

The 30-year bond yield fell 3.2 basis points to 4.7958%. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 1.7 basis points to 3.468%.

In energy markets, oil prices were angling for a second day of gains as investors assessed the likelihood of further U.S. sanctions against Russia and the supply risks posed by a blockade of Venezuelan oil tankers.

U.S. crude rose 0.93% to $56.46 a barrel and Brent rose to $60.06 per barrel, up 0.64% on the day. Gold prices were lower even after softer-than-expected U.S. inflation data bolstered expectations of Federal Reserve rate cuts in 2026.

Spot gold fell 0.11% to $4,336.09 an ounce. U.S. gold futures rose 0.01% to $4,348.10 an ounce.

(Reporting by Sin?ad Carew in New York, Amanda Cooper in London, Stella Qui in Sydney. Editing by Kate Mayberry, Mark Potter and Jane Merriman)