[New York Stock Market] Slight Rise Amid Year-End Quiet Trading... S&P Approaches Record High

The three major indices of the U.S. New York stock market all closed slightly higher on the 27th (local time). Amid quiet trading as the year-end approaches, the S&P 500 index is close to reaching an all-time high.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average, which focuses on blue-chip stocks, closed at 37,656.52, up 0.30% (111.19 points) from the previous session. This surpassed the all-time high recorded on the 19th. The S&P 500, centered on large-cap stocks, rose 0.14% (6.83 points) to 4,781.58, and the tech-heavy Nasdaq index increased 0.16% (24.60 points) to 15,099.18.

Within the S&P 500, energy, communication, and utility sectors declined, while the other eight sectors rose. Tesla gained nearly 2% from the previous session following foreign reports that it is preparing to upgrade the Model Y at its Shanghai factory. Bit Digital surged more than 18% on news that it plans to double its mining operations next year. NetEase showed a nearly 5% drop amid promises from Chinese authorities to ease regulations on gaming companies. Apple closed slightly higher after news that the U.S. Federal Court of Appeals decided to temporarily suspend the import ban on Apple Watch sales in the U.S. during ongoing patent infringement litigation. The New York Times (NYT) rose nearly 3% after filing a copyright infringement lawsuit against Microsoft (MS) and OpenAI.

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With a lack of year-end catalysts, trading volume has fallen to about half of last week's level. Investors are closely watching whether the New York stock market can continue its rally in the final trading week of 2023. The S&P 500 has risen for eight consecutive weeks through last week, approaching the all-time high of 4,796.56 recorded in January 2022. The Dow also set a new record high on this day. Sam Stovall, Chief Investment Strategist at CFRA, said, "The market hopes to end the year by breaking through this high," but he also predicted that the S&P 500 might pause after reaching a new peak.

The recent rally has been supported by expectations of interest rate cuts next year. According to the Chicago Mercantile Exchange (CME) FedWatch, the probability that the Federal Reserve (Fed) will cut rates by at least 0.25 percentage points in March next year is as high as 90% in the federal funds (FF) futures market.

However, some on Wall Street warn that the market's optimism based on rate cut expectations is excessive. Julie Biel, Chief Market Strategist at Cain Anderson Rudnick, said, "Expectations are too high," adding, "The Fed is still trying to avoid repeating the mistakes of the 1970s when inflation surged again." Thorsten Slok, Chief Economist at Apollo Global Management, also appeared on CNBC, stating, "The fight against inflation is not over yet," and predicted that the Fed might lean toward a more hawkish stance again.

In the New York bond market, the benchmark 10-year U.S. Treasury yield fell to around 3.78%. The 2-year yield, which is sensitive to monetary policy, dropped to about 4.23%. The dollar index, which measures the value of the U.S. dollar against six major currencies, declined about 0.5% to 100.9.

International oil prices fell as logistics conditions were monitored following attacks on cargo ships near the Red Sea. On the New York Mercantile Exchange, the price of West Texas Intermediate (WTI) crude oil for February delivery closed at $74.11 per barrel, down $1.46 (1.93%) from the previous day.