Wall Street Starts the Week on a Positive Note
Wall Street’s main indexes began the last week of the year on a positive note, with investor sentiment boosted by growing bets of early rate cuts by the Federal Reserve after the Christmas holidays. All S&P 500 sub-indexes were in the green, except healthcare, and the benchmark index was close to reaching its record closing high from January 2022. A close above that level will confirm that the index has been on a bull run since October 2022. However, trading volumes are expected to remain low this week as many market participants are away for year-end holidays.
Inflation Continues to Ease
U.S. stocks closed higher on Friday as the Commerce Department’s Personal Consumption Expenditures (PCE) report showed inflation continuing to move toward the Federal Reserve’s target of 2%. This marked the eighth consecutive weekly gain for the S&P 500, its longest winning streak since late 2017. The upcoming key economic data for this week is the jobless claims report on Thursday, and there are no scheduled speeches by Fed officials. Traders’ bets on a rate cut in March 2024 have increased significantly, indicating market expectations of a possible rate cut by the central bank.
Market Performance and Movers
The Dow Jones Industrial Average was up 0.12%, the S&P 500 was up 0.22%, and the Nasdaq Composite was up 0.38% in morning trading. Shares of Manchester United rose 2.0% after billionaire Jim Ratcliffe purchased a 25% stake in the football club. Gracell Biotechnologies saw a significant increase of 59.6% following AstraZeneca’s announcement to acquire the China-based firm. Intel Corp also rose 2.9% after receiving a $3.2 billion grant from Israel’s government for a new chip plant. However, crypto-related stocks like Marathon Digital, Bitfarms, and Riot Platforms experienced declines due to a drop in Bitcoin prices.
Hot Take: Positive Start to the Week on Wall Street
Wall Street kicked off the last week of the year on a positive note, driven by expectations of early rate cuts by the Federal Reserve. With most market participants away on year-end holidays, trading volumes are likely to remain low. The recent PCE report showing a decrease in inflation and the extended winning streak of the S&P 500 have contributed to investor sentiment. However, it is expected to be a relatively quiet trading session without any strong volume indicating a significant rally. Market expectations of a rate cut have increased, further shaping the outlook for the coming months.
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