Traders work on the floor at the New York Stock Exchange.
Brendan McDermid | Reuters
The S&P 500 soared to a closing high for 2023 on Friday, extending November’s rally into the new month.
The broad market index rose by 0.59%, ending the session at 4,594.63. The tech-heavy Nasdaq Composite advanced 0.55% to 14,305.03. The Dow Jones Industrial Average added 294.61 points, or 0.82%, to close at 36,245.50.
The Dow rose to another new high on Friday, bringing its 2023 gain to nearly 9.4%, after it notched a new 2023 high and capped off its best month in more than a year.
The S&P 500 closed at its highest level since March 2022. Stocks bringing the broad market index to these heights include Ulta Beauty and Boston Properties, which rose 10.8% and 11.2%, respectively. Paramount popped 9.8%.
Federal Reserve Chair Jerome Powell on Friday pushed back against the market’s expectations for interest rate cuts ahead, saying it is “premature to conclude with confidence” that monetary policy is “sufficiently restrictive.”
Yields fell as equities rallied during the day, even after Powell’s cautious remarks as traders interpreted them as a signal that the central bank is at least done with hikes. The yield on the 10-year Treasury note fell more than 13 basis points to 4.213%.
“There’s a trifecta of drivers here. The first is the inflation. Second is the Fed seeming like it may be stepping to the sidelines, and then third is this cooling in the economy that is starting to unfold, but at a very gradual pace,” said Mona Mahajan, senior investment strategist at Edward Jones. “It’s almost like a Goldilocks cooling. It’s not too hot. It’s not too cold. And that’s exactly what markets are embracing.”
Mahajan added that markets seem to be pricing in rate cuts, but not until the back half of 2024.
November’s big rally was due in part to traders beginning to believe the Fed was done raising rates and that the central bank may even start cutting them in the first half of next year. The Fed next…
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