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Wall Street Starts Last Week of the Year with Bullish Momentum

On Tuesday, Wall Street's key indices began the final week of the year on a bullish note.

Wall Street’s primary indices initiated Tuesday’s final week of the year on a positive trajectory. This surge came from growing speculation regarding early rate cuts by the Federal Reserve, uplifting investor sentiment post-Christmas holidays.

Bullish Sentiment and Record Proximity:

Expectations of a dovish policy shift by the Fed in response to signs of cooling inflation have propelled the benchmark S&P 500 index toward its previous record high achieved in January 2022. A close above this level would affirm the index’s bullish trajectory since its bottom in October 2022.

US stocks closed higher after the Commerce Department’s PCE report indicated a continual descent of inflation toward the Fed’s targeted 2 percent annual rate. 

This report contributed to the eighth consecutive week of gains for the major indexes, marking the S&P 500’s longest winning streak since late 2017.

Market Analysis and Rate Cut Expectations:

Market sentiment remains buoyant, with expectations of notably reduced interest rates fueling the ongoing rally. 

Traders’ bets on a 25 basis point rate cut by March 2024 stood at about 83 percent, a significant surge from the 21 percent recorded in November, according to the CME Group’s FedWatch tool.

Sector Performance and Notable Stocks:

Except for healthcare, all major S&P 500 sector indexes reflected gains. Intel witnessed a 4.0 percent rise following Israel’s agreement to grant the company $3.2 billion for a new $25 billion chip plant. 

This development propelled the Philadelphia semiconductor index to a record high, while the Russell 2000 index reached its highest level in 20 months.

Market analysts anticipate a continued shift towards smaller and mid-cap stocks as a dominant theme entering 2024. 

However, low trading volumes are expected this week due to year-end holidays, with minimal key economic data anticipated except for the jobless claims report.

Current Index Performance:

As of midday, the Dow Jones Industrial Average was up 0.24 percent, the S&P 500 had gained 0.25 percent, and the Nasdaq Composite had risen by 0.31 percent.

Shares of Manchester United surged by 2.2 percent after billionaire Jim Ratcliffe finalized a long-awaited deal to receive a 25 percent stake in the football club. 

Additionally, Gracell Biotechnologies saw a substantial 59.8 percent increase following AstraZeneca’s announcement of acquiring the China-based firm for up to $1.2 billion.

Market Metrics and Momentum:

Advancing issues surpassed decliners by a significant margin on the NYSE and Nasdaq. 

The S&P index registered 26 new 52-week highs without new lows, while the Nasdaq registered 129 new highs against 29 new lows.

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