Dow reaches 2023 closing high as markets turn the page on a robust November
Sign up now: Get ST's newsletters delivered to your inbox
Traders work on the trading floor of the New York Stock Exchange, in New York City.
PHOTO: REUTERS
NEW YORK - The Dow Jones Industrial Average closed at its highest level for 2023 as investors crossed the finish line of a banner month for stocks and viewed cooling inflation data in the context of Federal Reserve monetary policy.
The Dow was the clear outperformer, breaching its 2023 intraday high with a solid boost from Salesforce on the heels of its consensus-beating earnings report.
Tech and tech-adjacent momentum stocks, led by Nvidia, weighed on the S&P 500 and the Nasdaq.
“We’re putting the cherry on top of a banner month,” said Mr Ryan Detrick, chief market strategist at Carson Group in Omaha. “It’s a nice reminder for investors how worried everyone was a month ago, and we just finished one of the best months in history for stocks.”
Among data released on Nov 30 morning, the Commerce Department’s closely watched Personal Consumption Expenditures (PCE) report showed inflation is cooling as expected, along with consumer spending. The data reinforced expectations that the Fed has completed its rate hiking cycle.
While New York Fed president John Williams reiterated the central bank’s determination to remain data dependent, he would not rule out the possibility of further rate hikes if inflation fails to continue to moderate.
“Kicking off much of the strength this month was the realisation that inflation is quickly coming back to earth we saw that again today with core PCE data suggesting inflation is no longer a major headwind,” Mr Detrick added.
Financial markets have priced in a 95.8 per cent likelihood that the central bank will let its key Fed funds target rate stand at 5.25 per cent to 5.5 per cent at December’s policy meeting.
“There’s likely no rate hikes any time soon, the next move will likely be a cut, probably in the middle of next year,” Mr Detrick said. “The massive drop in (Treasury) yields this month is the bond market’s way of saying it thinks the Fed is indeed done raising rates.”
US Fed chairman Jerome Powell is scheduled to participate in two separate discussions on Dec 1, at 11am ET and again at 2pm ET.
According to preliminary data, the S&P 500 gained 18.21 points, or 0.38 per cent, to end at 4,568.79 points, while the Nasdaq Composite lost 32.27 points, or 0.23 per cent, to 14,226.22.
The Dow Jones Industrial Average rose 517.28 points, or 1.46 per cent, to 35,947.70.
Salesforce jumped following the company’s higher-than-expected profit forecast based on solid demand for its cloud services.
Ford Motor slid after the automaker set the cost of a new labour deal at US$8.8 billion (S$11.7 billion) and cut its full-year forecast.
Data cloud company Snowflake surged after it forecast fourth-quarter product revenue above Street estimates.
Pinterest and Snap gained ground following Jefferies’ upgrade of the social media firms to “buy” from “hold.” REUTERS
