On the second-to-last trading day of 2023, the S&P 500 eked out a modest gain, retracing its early advances just moments before the closing bell.
The benchmark index wrapped up a session characterized by light trading volume, finishing a mere 0.3% below its previous record closing high set back on January 3, 2022.
Simultaneously, the Dow Jones Industrial Average saw a slight uptick, achieving its second consecutive record-high closing level.
However, the Nasdaq didn’t fare as well, ending the day with a slight dip. Despite these fluctuations, all three major indexes were still poised for gains across the monthly, quarterly, and annual timeframes.
Ryan Detrick, the chief market strategist at Carson Group in Omaha, characterized this end-of-year rally as one of the most impressive in recent memory.
He pointed out that a significant portion of this rally occurred before the Federal Reserve’s pivot in mid-December.
Detrick emphasized the remarkable journey from the depths of the bear market in the previous year, highlighting that, in investing, even in challenging times, brighter days eventually prevail.
If the S&P 500 had managed to settle above its prior all-time closing high, it would have signified a transition from a bear market, which it experienced in October 2022, to a bull market. Detrick saw this as a subtle indicator that economic strength might be in store for 2024.
Early data releases on that day, including jobless claims, pending home sales, and preliminary trade/inventories data, painted a picture of an economy that was softening but still resilient.
This narrative led to increased speculation that the U.S. Federal Reserve might move to cut its policy rate earlier than initially anticipated, potentially enabling a soft landing and averting a recession.
As of the latest assessment, financial markets had priced in a 74.1% probability that policymakers would reduce the Fed funds target rate by 25 basis points in March, as indicated by CME’s FedWatch tool.
In terms of specific index performance, the Dow Jones Industrial Average saw an increase of 53.58 points, or 0.14%, closing at 37,710.1.
The S&P 500 gained 1.77 points, or 0.04%, closing at 4,783.35, while the Nasdaq Composite fell by 4.04 points, or 0.03%, to close at 15,095.14.
Among the 11 major sectors of the S&P 500, utilities experienced the largest percentage gain, while energy shares faced the most significant losses due to declining crude oil prices.
U.S.-listed shares of Chinese companies, including Alibaba Holdings, PDD Holdings, and JD.Com Inc, registered gains ranging from 0.6% to 2.7% as China’s blue-chip stocks surged, marking their most substantial increase in five months.
However, CytoSorbents faced a notable setback, with their stock sliding by 33.4% after their surgical device, designed to reduce bleeding during surgery, failed to meet its primary study goal.
Meanwhile, Boeing saw a 0.7% dip as the aircraft manufacturer urged airlines to inspect newer 737 MAX airplanes for potential issues with a loose bolt in the rudder control system.
On the New York Stock Exchange (NYSE), declining issues were evenly matched with advancing ones, with a 1.00-to-1 ratio, while on the Nasdaq, decliners slightly outnumbered advancers, with a 1.08-to-1 ratio.
In terms of new highs and lows, the S&P 500 posted 49 new 52-week highs, with no new lows, while the Nasdaq Composite recorded 141 new highs and 37 new lows.
For the day’s trading volume, it stood at 9.46 billion shares on U.S. exchanges, notably below the 12.57 billion average observed over the last 20 trading days.