US STOCKS-Wall Street ends higher in final stretch of 2023, rate cuts in view

Gracell Biotechnologies

26/12/2023 21:00

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      Intel up on $3.2 bln grant from Israel
    

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      S&P 500 touches highest intraday level since Jan 2022
    

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      Manchester United rises as Jim Ratcliffe takes 25% stake
    

  
 (Updates to market close)
    By Stephen Culp
       NEW YORK, Dec 26 (Reuters) - 
    U.S. stocks extended their rally on Tuesday, kicking off the
final week of 2023 with expectations that the Federal Reserve
will begin cutting interest rates as soon as March.
  
    All three major U.S. stock indexes rose in light trading,
with the S&P 500 touching its highest intraday level since
January 2022. All three are on track for monthly, quarterly and
annual gains.
        Interest rate sensitive megacap stocks and chip shares
led the upward momentum.
    On Friday, the three indexes notched their eighth straight
weekly gains - their longest weekly winning streaks in years -
as economic data indicated inflation is easing down closer to
the Fed's average annual 2% target.
    "It's going to be a fairly quiet trading session. The
momentum stays towards the upside, but I don't think we're going
to see any strong volume that would suggest we could be in for a
strong rally," said Peter Cardillo, chief market economist at
Spartan Capital Securities in New York.
    "We had a good inflation number on Friday. If inflation
continues to move down in January and February, there's a good
chance that the Fed may cut (rates) earlier than anticipated."
    The S&P 500 is on track to post its biggest quarterly gain
in three years, and is within 1% of its all-time closing high
reached in January 2022.
    Closing above that level - 4,796.56 - would confirm the
benchmark index has been in a bull market since touching the
bear market nadir, the closing low reached in October 2022.
    Stocks' eight-week rally shifted into overdrive two weeks
ago after the Fed signaled the end of its rate hike cycle and
opened the door to potential rate cuts in 2024.
    At last glance, markets had baked in a 72.7% likelihood of a
25 basis point reduction in the Fed funds target rate as soon as
March, according to CME's FedWatch tool.
    According to preliminary data, the S&P 500
 .SPX  gained 20.31 points, or 0.43%, to end at 4,774.94 points,
while the Nasdaq Composite  .IXIC  gained 81.97 points, or
0.55%, to 15,074.95. The Dow Jones Industrial Average
 .DJI  rose 160.69 points, or 0.43%, to 37,546.66.
    Energy shares  .SPNY  enjoyed the heftiest percentage gain,
boosted by surging crude prices  CLc1  as Middle East strife
ratcheted up supply concerns, while optimism over Fed rate cuts
fueled demand hopes.
    Shares of Manchester United  MANU.K  rose after billionaire
Jim Ratcliffe struck a long-awaited deal to buy a 25% stake in
the soccer club at $33 per share.
    Gracell Biotechnologies  GRCL.O  surged after AstraZeneca
 AZN.L  said it will buy the China-based firm for up to $1.2
billion.
    Intel Corp  INTC.O  advanced following the Israeli
government's agreement to endow a $3.2 billion grant for a $25
billion plant the chipmaker plans to build in southern Israel.

 (Reporting by Stephen Culp; Additional reporting by Shubham
Batra and Amruta Khandekar in Bengaluru; Editing by Richard
Chang)
 ((stephen.culp@thomsonreuters.com; 646-223-6076;))