Dec 15, 2023: Stocks saw marginal movement on Friday, causing the Dow Jones Industrial Average to dip slightly even as it eyed continued gains for the week, propelling the 30-stock average to record highs.
The Dow marked a 71-point decline, equivalent to 0.2%. Simultaneously, the S&P 500 experienced a 0.2% slip, while the Nasdaq Composite rose by 0.3%. Costco shares surged by almost 3% following the retailer’s surpassing of Wall Street’s quarterly result estimates and the announcement of a $15 per share dividend.
This week’s trajectory indicates the seventh consecutive positive week for major averages. As of Thursday, the Dow saw a weekly gain of 2.8%, while the S&P 500 and Nasdaq Composite recorded increases of 2.5% each. Notably, the S&P 500’s potential seventh successive weekly rise signifies its longest winning streak since 2017, while the Dow appears set for a nine-week winning streak, its most prolonged run since 2019.
Close to reaching a new all-time high, the S&P 500 sits within 1.6% of its previous record set in January 2022. Comparatively, the Nasdaq remains approximately 8% below its highest-ever close and around 9% from its all-time intraday peak.
Amidst ongoing market shifts due to the S&P 500 and Nasdaq-100 rebalancing, anticipated adjustments include Uber’s inclusion in the S&P 500, with DoorDash and MongoDB set to join the Nasdaq-100. Concerns have arisen regarding potential outsized weighting for certain stocks within these indexes.
This week’s market surge stemmed from the Federal Reserve’s acknowledgment on Wednesday that efforts to curb inflation are showing results, signaling three expected interest rate cuts in 2024, which significantly bolstered investor morale. Stronger-than-expected November retail sales, coupled with cooler inflation data, contributed to hopes for the Federal Reserve’s ability to guide the economy toward a soft landing.
Despite the optimistic market outlook, New York Fed President John Williams tempered expectations around the likelihood of the central bank implementing rate cuts next year. In an interview with CNBC’s Steve Liesman on Friday, Williams highlighted that discussions about rate cuts were not currently in focus.