Data showing lower inflation in the United States and Europe lifted stocks Thursday, with the dollar advancing as traders bet on faster ECB interest rate cuts following the surprisingly big drop in European prices.

A key pricing measure used by the US Federal Reserve to set interest rates eased further last month amid a drop in energy prices, according to government data published on Thursday.

The annual personal consumption expenditures (PCE) price index rose 3.0 percent in October, down 0.4 percentage points from a month earlier, the US Commerce Department said.

Meanwhile, consumer prices in the 20-nation eurozone rose a lower-than-expected 2.4 percent in November from a year earlier, the EU's official statistics agency said, the smallest annual gain since July 2021.

The data will provide comfort to the European Central Bank, which has paused its unprecedented streak of interest rate hikes, although it has remained cautious about declaring victory over once red-hot inflation.

After an up day in Europe, Wall Street stocks had a mixed day, with the Nasdaq edging lower and the Dow and S&P 500 both rising to conclude a buoyant November. 

The dollar, meanwhile, charged higher against other currencies, including the euro.

Analysts are now betting on when the ECB will begin to cut rates.

"The larger-than-expected fall in inflation in November means it is becoming increasingly untenable for policymakers to claim that they are not even thinking about rate cuts," said Andrew Kenningham, chief Europe economist at Capital Economics.

"We are now penciling in a first cut for next June, rather than September," he added.

Pantheon Macroeconomics predicted the ECB would start rate cuts in March. 

"We can't be sure this picture will survive the next few months, especially not if gas prices snap back in response to a sustained cold spell," Pantheon said.