Wall Street indices show positive gains as hopes for pausing the tightening cycle rise

labor market is recovering

Wall Street indices show positive gains as hopes for pausing the tightening cycle rise.

The strong gains last month in Wall Street were due to the rising hopes that U.S. monetary policymakers will stop the tightening cycle for good. This hope, however, might change this month if the Fed decides to walk on the opposite side of market demands and hopes.

Like the previous session, Wall Street indices rallied on the last trading day this week and the first session of the last month of this year. On a year-to-year basis, marketers estimate that the stock market’s main indices have rallied and recovered more than 40% of last year’s losses. Starting with the S&P 500 benchmark and the tech-heavy Nasdaq composite, the two indexes registered this month the biggest market rally gains for the first time since July 2022. The Dow Jones, on the other hand, also posted its highest monthly gains in November for the first time since October 2022. Despite the rally, the concerns of a market recession remain a concern for all who are interested in the global financial cycle.

Whether due to inside or outside factors, global macroeconomic changes have just taken a dangerous turn. The unconditional support that the U.S. provides to Ukraine and Israel might create a severe conflict in the U.S. political powerhouse. Even in public view, the Biden administration demonstrated its failures and incapabilities in managing its foreign policy.

Till now, this assumption has remained only a market assumption or future market threat assessment. However, the data shows that inflation is cooling and its trend is decreasing. Two string indicators are the October PCE price index, which rose by 3% YoY, signaling cooling U.S. inflation. Furthermore, the previous month recorded 3.4%, but the trajectory is descending.

As of 13:02, Dow Jones: Last at 36,192.06, has increased by +241.17 points, or +0.67%. The S&P 500 benchmark lasted at 4,593.48, going up by +25.70 points, or +0.56%. As for the tech-heavy Nasdaq composite tech stock index, which was last at 14,290.66, the futures rose by +64.44 points or +0.45%. Overall, most indices have shown positive movement, with the Small Cap 2000 experiencing a notable gain while the S&P 500 VIX has seen a decline.

In other economic news, oil prices showed resilience on Friday, bouncing back from recent losses following OPEC’s decision to implement voluntary output cuts. Several news reports indicate that the oil cartels are planning for another major daily oil production cut at the start of the new year. As for the stock market and oil indices, crude futures inched up 0.28% to $76.18 per barrel, while the Brent contract rose 0.28% to $81.9 per barrel, offsetting some of November’s 6% declines. OPEC+ agreed to a voluntary reduction of 900,000 barrels per day, extending existing cuts of 1.3 million barrels per day. Despite efforts to counter a crude oil surplus in Q1 2024, the impact may not be as pronounced as initially expected. Concurrently, gold futures reached $2,036.40/oz, and EUR/USD traded 0.3% lower at 1.0851.

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