Nasdaq Index, Dow Jones, S&P 500 News: Bullish Momentum Prevails on Rate Cut Hopes

Highlights

• S&P 500 on the brink of an unprecedented 8-week winning streak.
• Expectations of Federal Reserve rate cuts surge amidst a broad market rally.
• 10-year U.S. Treasury yields drop significantly, fueled by rate cut beliefs.

S&P 500 Extends Streak Amid Inflation Relief

The S&P 500 extended its eight-week winning streak, while the Dow Jones Industrial Average had slight dips, and the Nasdaq saw gains.

Broad Rally, Fed Rate Cut Expectations

This streak is significant, last seen for the S&P 500 in 2017 and the Dow in 2019. This week, the S&P 500 gained 0.58%, the Dow 0.27%, and the Nasdaq 1%. The Russell 2000 surged 1.7% for a sixth straight positive week, amid falling bond yields and rising Fed rate cut expectations.

Bond Yields Fall on Rate Cut Hopes

10-year U.S. Treasury yields fell almost a percentage point since October, driven by beliefs the Fed may cut rates as early as March.

Challenges for Nike, Rocket Lab Soars

Nike shares dropped 11% in premarket trading, revising sales downward and announcing a $2 billion cost-cutting plan over three years. This also impacted FootLocker. In contrast, Rocket Lab surged 12.6% in premarket trading following a $515 million agreement with a U.S. government customer for 18 space vehicles. Coinbase gained 1.3% in premarket trading on a positive rating from JMP.

Inflation Data Relieves Worries

The Fed’s preferred inflation gauge showed a 3.2% annual rate in November, below expectations of a 0.1% month-over-month rise and a 3.3% year-over-year increase. The core personal consumption expenditures price index increased 0.1% for November, with a 3.2% year-over-year rise.

Strong Durable Goods Orders

Durable goods orders beat estimates, increasing 5.4% in November after a 5.1% decline in October. Excluding transportation, new orders rose 0.5%, while excluding defense, new orders surged by 6.5%.

Positive Outlook Amid Challenges

Despite obstacles, the stock market’s upward trend persists, benefiting small-caps and mid-caps due to the Fed’s accommodative stance.

Short-Term Forecast: Bullish Momentum

In the short term, the market is expected to remain bullish, driven by the eight-week winning streak, Fed rate cut expectations, and positive economic indicators.

Technical Analysis

The E-mini S&P 500 Index currently stands at 4813.50, surpassing both the 200-day moving average of 4455.55 and the 50-day moving average of 4532.49. This indicates a robust bullish sentiment, with the price comfortably above these key averages.

The absence of trend lines and minor resistance levels makes the main support at 4494.00 crucial. As long as the price remains above this level, the bullish momentum is likely to persist.

In summary, the market sentiment is unequivocally bullish, with strong support from moving averages and a pivotal main support level at 4494.00.