S&P 500 closes nearest all-time highs near $4,800

The S&P 500 is nearing all-time highs near $4,800, but a late-day pullback due to rising Treasury yields has pushed assets lower. The market’s risk rally, driven by rate cut expectations in 2024, has been slowed down by a surprise increase in US 7-year Treasury yields, causing a reversal of the week’s risk appetite flows.

Investors are betting on looming rate cuts to begin as early as March and to reach a maximum of 160 basis points by the end of 2024, indicating that money markets are enthusiastic about an accelerated pace of Federal Reserve rate cuts in that year. With a limit set for January 2021 at $4,814.68, the stock index is headed for its ninth consecutive week of increases in the S&P 500.

Since rising from the 200-day Simple Moving Average at $4,250 in early November, the S&P 500 has been rising. The index is positioned to break out of all-time highs if it crosses the $4,800 barrier, but it is positioned for a lengthy slide into the last swing low from late October at $4,100 if it pulls back from severely oversold circumstances.