U.S. stocks rose Monday after the three major averages notched their seventh straight week of gains.
The Dow Jones Industrial Average gained 31 points, or 0.1%. The S&P 500 climbed 0.3%, and the Nasdaq Composite advanced 0.1%.
The winning streak for the S&P 500 marked its longest string of weekly gains since 2017. The broad market index is up by 3.3% for the month, while the Dow and Nasdaq are 3.8% and 4.1% higher, respectively. The Dow also posted an intraday record on Friday, and the Nasdaq 100 had 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.
“Slowing inflation, low growth expectations, and intact growth momentum is a great combination from a market perspective. We’ve argued time and again that this is a backdrop that is as Goldilocks as it gets,” HSBC chief multi-asset strategist Max Kettner wrote in a Friday note.
Kettner noted, however, that near-term growth and earnings expectations in the U.S. remain weak. The current winning streak seems similar to the 2017-2018 market rally, he added, where broadly bullish sentiment gave way to disappointment in January “by the blow-up in implied equity market volatility.”
“So, for the first time in H2, we are starting to be wary of the positive momentum. It may be prudent to start 2024 on a more cautious note,” Kettner said.