empty
27.12.2023 06:26 AM
The final chord of 2023 on Wall Street: Growth and anticipation of rate cuts

This image is no longer relevant

This week, on Tuesday, U.S. markets continued the upward trend, entering the final week of the year with anticipation that the Federal Reserve might start cutting interest rates as early as March.

All three key U.S. stock indexes rose after the Christmas holidays, with the S&P 500 index updating its record intraday level first reached in January 2022. All are on track for significant monthly, quarterly, and annual growth.

Shares of large-cap companies sensitive to interest rate changes and the semiconductor sector led this trend.

Last Friday, these indexes showed their eighth consecutive week of gains – the longest winning streak in many years, made possible by economic data indicating a slowdown in inflation and approaching the Federal Reserve's annual target of 2%.

The S&P 500 index is on the verge of its most significant quarterly rise in the last three years and is just half a percent from its historical high, recorded in January 2022.

If the index exceeds the level of 4796.56, it will confirm that it has entered a bull market phase since reaching the lowest point of the bear market in October 2022.

The eight-week stock rally accelerated two weeks ago, after the Federal Reserve signaled the end of the rate-hiking cycle, opening the door for potential rate cuts in 2024.

According to the latest updates from CME Group's FedWatch tool, investors assess the probability of the Federal Reserve cutting the target rate by 25 basis points in March as extremely high – at 72.7%.

The Dow Jones Industrial Index (.DJI) showed impressive growth by 159.36 points, or 0.43%, reaching 37,545.33. The S&P 500 (.SPX) also showed positive dynamics, adding 20.12 points, or 0.42%, reaching 4,774.75, while the Nasdaq Composite Index (.IXIC) strengthened its positions by 81.60 points, or 0.54%, closing at 15,074.57.

Positive closing was noted in all 11 key sectors of the S&P 500 index.

The most significant percentage growth was recorded in the energy sector (.SPNY), fueled by rising oil prices due to increased concerns about supplies from the Middle East. This trend is further strengthened by optimism related to expectations of Fed rate cuts, which in turn supports hopes for increased demand.

Shares of Manchester United jumped 3.4% following the news of billionaire Jim Ratcliffe's deal to purchase 25% of the club's shares at $33 per share.

Shares of Gracell Biotechnologies (GRCL.O) rose 60.3% following the announcement that AstraZeneca (AZN.L) intends to acquire the Chinese company for $1.2 billion.

Intel Corp (INTC.O) shares also showed a significant increase of 5.2% following the news that the Israeli government had granted $3.2 billion for the construction of a $25 billion plant planned to be built in southern Israel.

On the New York Stock Exchange, the number of rising issues exceeded the number of falling ones by a ratio of 3.31 to 1, while on Nasdaq, this ratio was 2.25 to 1 in favor of rising companies.

The S&P 500 index demonstrated remarkable dynamics, reaching 50 new 52-week highs without a single new low, while the Nasdaq Composite index recorded 222 new highs and 48 new lows.

The trading volume on American stock exchanges amounted to 9.99 billion shares, less than the average of 12.56 billion over the last 20 trading days.

The yield on 10-year U.S. Treasury notes decreased, dropping to 3.895%, while the yield on two-year Treasury notes rose by 1.8 basis points to 4.3584%.

U.S. oil prices slightly reduced their previous growth, finishing the trades with a 2.1% increase to $75.12 per barrel. Meanwhile, Brent oil prices rose by 2.01%, reaching $80.66 per barrel.

The U.S. dollar index fell by 0.17% to 101.47, almost matching the five-month low of 101.42 recorded last Friday. A weaker dollar helped the euro strengthen by 0.3% to $1.104.

Investors continued to analyze data published last Friday, which showed that U.S. prices fell in November for the first time in more than three and a half years, highlighting the resilience of the U.S. economy.

U.S. inflation, measured by the Personal Consumption Expenditures (PCE) Price Index, decreased by 0.1% last month.

Stock investors welcomed recent signals from the Fed about the prospects for rates. Following its policy meeting on December 13, the Fed indicated that it had reached the end of the rate-tightening cycle and opened the door for rate cuts next year.

Currently, markets assess the probability of the Fed cutting rates by 25 basis points in March at 75%, according to data from the CME FedWatch tool, compared to a probability of just 21% at the end of November. Markets also anticipate rate cuts of more than 150 basis points next year.

Thomas Frank,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Boeing climbs, Best Buy falls as investors rebalance across sectors

Best Buy shares fell after the company cut its full-year sales and earnings forecasts. Boeing, on the other hand, gained ground as its CEO announced plans to ramp up production

13:49 2025-05-30 UTC+2

US Market News Digest for May 30

The S&P 500 opened the session on a positive note but soon reversed course after officials clarified that previously overturned tariffs would remain in place pending the outcome

Ekaterina Kiseleva 12:20 2025-05-30 UTC+2

Boeing Gains, Best Buy Falls: Why Investors Are Betting on Different Assets

Best Buy Falls After Full-Year Sales, Profit Outlook Shrink Boeing Gains as CEO Looks to Boost 737 MAX Production Japan's Nikkei Lagging as Yen Strengthens on Safe Haven Demand Indices

Thomas Frank 10:10 2025-05-30 UTC+2

US Market News Digest for May 29

Markets reacted to a US Court of International Trade ruling that found the Trump administration's tariff actions exceeded its authority. The decision has introduced fresh uncertainty for the S&P

Ekaterina Kiseleva 11:15 2025-05-29 UTC+2

Stock storm: Nvidia soars, Dow falls, court knocks down Trump tariffs

Nvidia shares up 5% after close; co reports quarterly results Dick's Sporting Goods rises after Q1 results beat expectations US trade court blocks Trump tariffs European stocks rise

Thomas Frank 10:49 2025-05-29 UTC+2

From Nvidia to Xiaomi: What's Driving Stock Market Growth and Decline Today

Indices Rising: Dow 1.78%, S&P 500 2.05%, Nasdaq 2.47% Consumer Confidence Recovers in May Temu Parent PDD Holdings Falls on Quarterly Revenue Slip Chinese Xiaomi Shares Set to Rise 2.3%

Thomas Frank 12:06 2025-05-28 UTC+2

Whoever doesn't risk a recession doesn't reduce the national debt? Trader's calendar on May 29–31

To be at the center of global attention and to "shape the planet's destiny" — that's what Donald Trump enjoys most. For him, it's essential to constantly generate headlines

Svetlana Radchenko 11:47 2025-05-28 UTC+2

US Market News Digest for May 28

The S&P 500 index has broken through the key 5,908 level, signaling the end of its recent correction and opening the door to further upside. A break above the resistance

Ekaterina Kiseleva 11:25 2025-05-28 UTC+2

US Market News Digest for May 27

US President Donald Trump announced a 50% tariff on imports from the EU, yet financial markets responded with restraint. Investors are increasingly adopting a "threat and retreat" strategy, buying stocks

Ekaterina Kiseleva 11:54 2025-05-27 UTC+2

Nvidia on the agenda: markets await quarterly report, dollar nears fifth straight monthly decline

Stock markets showed mixed dynamics on Tuesday after Donald Trump unexpectedly postponed the introduction of the promised 50% tariffs on goods from the European Union. The move only increased uncertainty

Thomas Frank 11:31 2025-05-27 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.