Dow Jones Industrial Average experienced gains on Thursday as the 10-year Treasury yield fell below 4%, and an unexpected rise in retail sales provided investors with confidence that the economy would experience a smooth landing in 2024. The Dow closed at a new high, rising 158 points or 0.43% to reach 37,248.35. Its previous milestone was the first-ever close above 37,000 on Wednesday. The S&P 500 also saw an increase of 0.26%, closing at 4,719.55, and the Nasdaq Composite gained 0.19%, ending the day at 14,761.56.
This drop below 4% in the 10-year Treasury note yield, witnessed for the first time since August, was driven by traders speculating on rate cuts anticipated in 2034. The decline in interest rates followed the Dow’s rise of over 1% on Wednesday, reaching a record high above 37,000, following the Federal Open Market Committee’s indication of a potential three-time rate cut next year.
Bank of America’s Chief U.S. Economist, Michael Gapen, stated that the Federal Reserve delivered the expected dovish pivot during the December meeting. While not anticipating a complete shift towards an easing bias, Gapen noted the Fed’s move toward a more balanced reaction and considered it successfully accomplished.
Source (CNBC)
