Title: S&P 500 Extends Year-End Rally Amid Cooler Inflation Data
The S&P 500 continued its year-end rally on Friday, buoyed by cooler inflation data that eased concerns over rising interest rates. While the Dow Jones Industrial Average experienced a slight dip, the Nasdaq Composite managed to rise, contributing to the overall positive sentiment in the market. The strong performance pushed the S&P 500 to within just 0.8% of its record close.
However, not all stocks saw gains during the session. Retail giant Nike witnessed a significant 12% drop in its stock after revising its sales outlook and announcing plans to cut costs. Despite this setback, the S&P 500 remained largely unaffected, thanks to the positive macroeconomic indicators.
The Federal Reserve’s preferred inflation gauge, which measures personal consumption expenditures, came in lower than expected. This news provided further reassurance to investors worried about the potential impact of inflation on the market.
In another positive development, all three major averages are on track to conclude their eighth consecutive positive week. This sustained rally demonstrates the market’s resilience and the growing optimism among investors.
The current market rally has seen a broadening of gains, with bond yields falling and traders anticipating potential rate cuts by the Federal Reserve. The anticipation of lower interest rates has increased investor confidence, leading to a surge in buying activity.
Notably, the small-cap Russell 2000 index has also benefitted from the positive sentiment, gaining over 1% and poised for its sixth consecutive positive week. This growth in small-cap stocks further highlights the widespread positive investor sentiment.
As the year-end approaches, it is important to note that the US stock market will remain closed on Monday for Christmas. Investors will have time to reflect on the current rally and make informed decisions for the coming weeks.
Overall, the S&P 500’s extension of its year-end rally, along with the positive performance of the Nasdaq Composite and the expected rate cuts, paints a bullish picture for the US stock market. Investors will be watching closely to see how the market performs in the final trading days of the year.
