(Bloomberg) — US stocks swung in choppy afternoon trading ahead of the Christmas holiday, they remain on track for an eight-week bull run. Treasuries notched a weekly advance.
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The S&P 500 edged higher on trading volume that trailed the 30-day day average at this time of day by roughly 25%. The benchmark is still on pace for an eight-week winning streak — the longest in more than five years as Wall Street’s conviction in early and deep rate cuts next year grows. The Nasdaq 100 is poised to notch an equally lengthy run — its longest since July 2021.
A 0.9% drop in Apple Inc. briefly weighed on equities gauges. The iPhone-making giant has added nearly $1 trillion in market value this year. Nike Inc. was also a drag, falling as much as 12% in New York trading, after the sports apparel maker flagged a weaker sales outlook and an as much as $2 billion cost-cutting plan.
The Supreme Court refusing to push forward a decision on former President Donald Trump’s immunity from prosecution may also have briefly stoked market volatility.
Some on Wall Street are positioning for further stock gains ahead as Friday kicked off the start of the “Santa Claus rally” — a seasonal trend where equities tend to climb into the first few days of the new year.
“Since 1928, the market has rallied an average of 1.7% between the last five days of December and the first two days of the new year, with a 79% positivity rate,” Craig Johnson, Piper Sandler’s chief market technician wrote.
He expects any pullbacks on the S&P 500 to be shallow with the gauge staying above its early December highs.
Stocks were initially buoyed by data showing the US core personal consumption expenditures price index — the Federal Reserve’s preferred core inflation metric — fell to 3.2% last month. Economists surveyed by Bloomberg had predicted the gauge would slip to 3.3% in November.
That helped cement investor expectations for earlier and deeper interest rate cuts next year, despite pushback from several Fed policymakers this week. Swaps traders are betting interest rates will be eased by more than 150 basis points in 2024, double the Fed’s forecast.
Read more: Fed’s Preferred Inflation Gauges Cool, Reinforcing Rate-Cut Tilt
Treasuries were mixed in Friday trading with the yield on the US 10-year bond hovering around 3.9%. Still, US bonds booked a fourth-straight week of gains — the best winning streak since March.
“We’ll argue the market was biased for a downside surprise which has translated to a somewhat counterintuitive price response” Ben Jeffery of BMO Capital Markets wrote after Friday’s PCE data. “We expect the proximity to the early close and long weekend will usher in a long winter’s nap for Treasuries.”
Additional reports Friday showed consumers were also gaining conviction that inflation in the world’s largest economy was on the right track. At the same time a reading on new-home sales in the US unexpectedly tumbled, though it may only be a temporary setback for an expected housing market recovery.
The dollar steadied amid a weekly rout that had the greenback trading near five-month lows against its Group-of-10 rivals. In commodities, Oil prices are poised for their biggest weekly gain in two months, as shippers took lengthy detours to avoid militant attacks in the Red Sea.
Some of the main moves in markets:
Stocks
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The S&P 500 rose 0.2% as of 2:57 p.m. New York time
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The Nasdaq 100 rose 0.2%
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The Dow Jones Industrial Average was little changed
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The MSCI World index rose 0.2%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.1015
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The British pound was little changed at $1.2701
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The Japanese yen fell 0.3% to 142.50 per dollar
Cryptocurrencies
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Bitcoin fell 0.8% to $43,671.95
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Ether rose 2.8% to $2,311.4
Bonds
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The yield on 10-year Treasuries was little changed at 3.89%
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Germany’s 10-year yield advanced one basis point to 1.98%
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Britain’s 10-year yield declined two basis points to 3.50%
Commodities
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West Texas Intermediate crude fell 0.3% to $73.69 a barrel
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Spot gold rose 0.4% to $2,053.98 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Vildana Hajric, Sujata Rao, Carter Johnson and Liz Capo McCormick.
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