Stock Market News Today: Markets make small moves as Wall Street rally loses steam (SP500)

U.S. stocks on Wednesday made small moves, with trading expected to be thin during the holiday-shortened week. Amid light news flow and economic data, Wall Street remained about 20 to 25 points shy of its record closing high.

With about an hour of regular trading left, the blue-chip Dow (DJI) had added 0.10% to 37,583.63 points. The benchmark S&P 500 (SP500) was marginally lower by 0.07% to 4,771.42 points, while the tech-heavy Nasdaq Composite (COMP.IND) was down 0.03% to 15,070.03 points.

Of the 11 S&P sectors, six were in the green, led by Consumer Staples. Energy topped the losers.

Treasury yields were lower. The longer-end 30-year (US30Y) and 10-year yields (US10Y) were both down 10 basis points each to 3.95% and 3.79%, respectively. The shorter-end more rate-sensitive 2-year yield (US2Y) was also down 10 basis points to 4.25%.

See live data on how Treasury yields are doing across the curve at the Seeking Alpha bond page.

U.S. stocks on Tuesday extended their eight-week bull run, helping market participants keep up hopes for a “Santa Rally” to cap a rollercoaster 2023. The Federal Reserve’s long-awaited dovish pivot earlier this month has helped sustain a rally that started at the end of October.

“MS Research believes the Fed reached the peak rate of this tightening cycle at 5.375% at the conclusion of the July 2023 FOMC meeting. In ‘24, MS Research expects the Fed to hold policy at 5.375% until June. June 2024 marks the first cautious step with a 25bp cut, followed by 25bp in September and a 25bps cut every meeting starting in 4Q24,” Morgan Stanley said in its 2024 outlook.

As per the CME FedWatch tool, markets appear to be even more optimistic, seeing a ~74% probability of the central bank delivering a 25 basis point rate cut in March next year.

Most brokerages have projected a 2024 year-end target of around 5,000 points for the benchmark S&P 500 (SP500). Ed Yardeni, president of global strategy and asset allocation analysis company Yardeni Research, has estimated a year-end level of 5,400 points, the highest among consensuses.

Wednesday’s economic calendar was fairly empty. Richmond Fed’s survey of manufacturing activity slipped further into negative territory in December. Meanwhile, December’s survey of business uncertainty increased for employment while abating for sales growth.

Turning to active movers, Tesla (TSLA) was among the top percentage gainers on the S&P 500 (SP500), after a Bloomberg report that the electric vehicle giant was preparing to revamp its best-selling Model Y car from its Shanghai plant.

The New York Times (NYT) rose after the company sued Microsoft (MSFT) and OpenAI for copyright infringement, alleging that the firms illegally used the newspaper’s content to train artificial intelligence models.