Futures inch up, firm rate cut bets drive strong gains in 2023
2023.12.29 07:19
© Reuters. FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., December 15, 2023. REUTERS/Brendan McDermid/File Photo
(Reuters) – U.S. stock index futures edged up in light trading on the final day of a turbulent 2023, with the benchmark and the Dow hovering around record-highs on growing expectations the Federal Reserve will cut interest rates early next year.
The Dow touched its all-time peak on Thursday, while the S&P 500 and the tech-heavy Nasdaq also inched closer to their one-year highs. The benchmark S&P was within a whisker of its Jan. 4 2022 intraday high.
The three main indexes also eyed their ninth straight weekly gain as well as both monthly and quarterly advances.
They were set for double-digit gains in 2023, with the Nasdaq on track for its strongest yearly jump since 2003, sharply rebounding from a slump last year.
With the Fed’s aggressive rate hikes cooling the U.S. labor market as well as pressuring the economy, investors have amplified their bets of rate cuts heading into 2024.
As per CME’s FedWatch tool, the probability of policymakers cutting the Fed funds target rate by 25 basis points in March stood at 70.1%.
The year 2023 was marked by aggressive Fed rate hikes, which were finally halted in September, the U.S. banking crisis in March, an artificial intelligence stocks boom, the Israel-Hamas war, economic concerns that eventually bolstered the case for policy easing bets, among others.
The information technology is set to emerge as the top sectoral gainer in 2023, up 56.8%, benefiting from an AI exuberance and a surge in megacap stocks, while the defensive utilities sector was the worst hit with a 10.1% decline.
Nvidia (NASDAQ:) and Meta Platforms (NASDAQ:) were the top annual gainers on the S&P 500, eyeing around three-fold gains.
Investors are winding down for the holiday season, with markets staying shut on Monday, Jan. 1, on account of New Year’s Day.
At 5:39 a.m. ET, were up 17 points, or 0.04%, were up 2.75 points, or 0.06%, and were up 21.75 points, or 0.13%.
Among corporate movers, Uber Technologies (NYSE:) and Lyft (NASDAQ:) lost 1.3% and 4.8%, respectively, in premarket trading, on report that Nomura downgraded the ride-sharing platforms.
