Wall Street loses steam on last day of upbeat 2023
Business
Wall Street loses steam on last day of upbeat 2023
(Reuters) - US stocks lost momentum on the final trading day of an upbeat year that witnessed the benchmark S&P 500 hover around its all-time high this week on growing expectations the Federal Reserve will cut interest rates early next year.
All three indexes were in the red by early afternoon on Friday, with the tech-heavy Nasdaq (.IXIC) leading losses on a decline in megacap stocks.
Some analysts have concerns about how equities will fare heading into 2024 after stellar gains in the last few months of this year, driven by hopes of a dovish Fed stance given cooling inflation.
"Expectations are that investors will lighten up early in the new year," said Sam Stovall, chief investment strategist at CFRA Research.
Some market participants may be trying to get ahead of the selling that could take place at the start of 2024, Stovall added.
The S&P slipped on Friday after coming within a whisker of its all-time closing high reached in January 2022 in the previous session. If it manages to end above that level, it would confirm the index entered a bull market after it hit the bear market closing trough in October 2022.
The three main indexes were on track for both monthly and quarterly advances, as well as double-digit gains in 2023.
The Dow Jones (.DJI) hit a record high on Thursday, while the Nasdaq has outperformed Wall Street peers, rising 43% this year given the artificial intelligence boom and a surge in megacap stocks.
As per CME's FedWatch tool, the probability of policymakers cutting the Fed funds target rate by 25 basis points in March stood at nearly 74%.
The year 2023 was marked by aggressive Fed rate hikes, which were finally halted in September, the US 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 (.SPLRCT), which is set to emerge as the top sectoral gainer in 2023, lagged on Friday with losses of 0.5%.
Nvidia (NVDA.O) and Meta Platforms (META.O), the top annual gainers on the S&P 500, fell 0.8% and 1.4%, respectively.
The small-cap Russell 2000 index (.RUT), which rallied sharply over the last two months, was down 1.3%.
Investors are winding down for the holiday season. The markets will be closed on Monday, Jan. 1, on account of New Year's Day.
At 12:05 p.m. ET, the Dow Jones Industrial Average (.DJI) was down 132.87 points, or 0.35%, at 37,577.23, the S&P 500 (.SPX) was down 24.42 points, or 0.51%, at 4,758.93, and the Nasdaq Composite (.IXIC) was down 112.61 points, or 0.75%, at 14,982.53.
Among corporate movers, Uber Technologies (UBER.N) and Lyft (LYFT.O) lost 2.3% and 4%, respectively, following a report that Nomura downgraded the ride-sharing platforms.
Declining issues outnumbered advancers for a 2.64-to-1 ratio on the NYSE and a 2.54-to-1 ratio on the Nasdaq.
The S&P index recorded 30 new 52-week highs and no new lows, while the Nasdaq recorded 58 new highs and 36 new lows.
