S&P 500 rises Monday as market adds to seven-week advance

A trader works, as a screen displays a news conference by Federal Reserve Board Chairman Jerome Powell following the Fed rate announcement, on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 13, 2023. 

Brendan Mcdermid | Reuters

Stocks rose Monday as the market maintained the momentum seen during its seven-week winning streak.

The Dow Jones Industrial Average gained 14 points, or 0.04%. The S&P 500 climbed 0.3%, and the Nasdaq Composite advanced 0.2%.

Energy stocks outperformed in the S&P 500, with the sector up more than 1% on rising oil prices. Coterra Energy and Marathon Oil shares were each higher by about 2%.

U.S. Steel shares surged more than 26% after Japan’s Nippon Steel said it would buy the company in a deal valued at $14.9 billion. Adobe shares gained roughly 1% after the company said it would end its $20 billion merger with cloud-based design platform Figma because of regulatory hurdles.

The S&P 500 is coming off its longest string of weekly gains since 2017. The broad market index is up by more than 3% for the month. The Dow is higher by more than 3%, and the Nasdaq has gained more than 4%. The Dow also posted an intraday record on Friday, while the Nasdaq 100 registered a new closing high.

Investor sentiment took a positive turn last week after the Federal Reserve indicated three short-term interest rate cuts are expected in 2024 amid cooling inflation. Treasury yields dropped, with the 10-year Treasury yield falling below the 4% level.

“It’s a continuation of what we’ve seen throughout much of the month and that is, inflation seems to be coming down, and interest rates are trending lower and earnings, to this point, have stabilized,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. “That’s a constructive backdrop for equities.”

Still, some weakness in earnings forecasts could dim the 2024 outlook for investors, according to Sandven, who said present projections are too high.

“The potential for corporate earnings pressures, in addition to valuations that are already elevated, are among factors that temper our cautiously optimistic outlook,” Sandven added. “We think the tug of war between bull and bear markets remains balanced for the new year.”