The S&P is headed for its longest weekly winning streak since 2004; The Dow Jones hit a record high on Thursday and the Nasdaq is headed for its biggest annual gain since 2003, after recovering sharply from last year’s decline.
The main Wall Street indices operate with slight drops in the last business day of the year and they are on track to close 2023 with double-digit profits. In a year marked by inflation in the United States and the increase in interest rates by the Federal Reserve in the first half of the year and the expectation of a cut for 2024 in the last months of the year.
In that context, the Dow Jones Industrial Average lost 32.34 points, or 0.1%, to 37,677.76 units, the S&P 500 drops 13.72 points, or 0.3%, to 4,769.63 units, and the Nasdaq Composite fell 92.13 points, or 0.6%, to 15,003.00 units.
The S&P is close to its all-time high reached in January 2022. If it ends above that level, it would confirm that the index has entered a bull market after hitting a bear market closing low in October 2022.
Wall Street celebrating, the three indices are on track to record monthly and quarterly advances
The S&P is headed for its longest streak of weekly gains since 2004. The Dow Jones hit a record high on Thursday, while the Nasdaq is headed for its biggest annual gain since 2003, after recovering sharply from the decline in the last year.
With the aggressive rate increases of the Federal Reserve cooling the US labor market and putting pressure on the economy, investors have expanded their rate cut bets into 2024.
The probability that monetary authorities will cut the Fed funds target rate by 25 basis points in March stood at almost 73%according to CME’s FedWatch tool.
The year 2023 was marked by the Fed’s aggressive rate hikeswhich finally stopped in September, the US banking crisis in March, the rise of artificial intelligence stocks, the war between Israel and Hamas, economic concerns that ended up reinforcing bets on the relaxation of monetary policy, among others.
Information technology is set to be the most bullish sector in 2023, up 57.2%, benefiting from AI exuberance and a rally in mega-cap stocks, while the defensive utilities sector was the most affected, with a decrease of 10.4%.
The markets will remain closed on Monday, January 1, New Year’s Day.
Source: Ambito
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