Stocks are drifting on the final day of trading for 2023 in what has been a surprisingly strong year of gains on Wall Street, according to an Associated Press report.
Yet the so-called Magnificent 7 companies — Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms and Tesla — accounted for about two-thirds of the gains in the S&P 500 this year, according to S&P Dow Jones Indices. Nvidia leads the group with a gain of about 240%.
The S&P 500 index rose 0.1% Friday and is sitting just below the all-time high it set in January of 2022. It is up 24.6% for the year.
The Dow Jones Industrial Average fell 3 points, or less than 0.1%, to 37,707, a day after hitting another record. It is up more than 13% for the year.
The tech-heavy Nasdaq rose 0.1% as of 9:55 a.m. Eastern and is up 44% for the year thanks largely to the movement of those marquee companies.
Wall Street is coming off a quiet day Thursday. All the major indexes are on track for weekly gains, with the S&P 500 on track for a rare ninth consecutive week of gains.
Investors in the U.S. came into the year expecting inflation to ease further as the Federal Reserve pushed interest rates higher. The trade-off would be a weaker economy and possibly a recession. But while inflation has come down to around 3%, the economy has chugged along thanks to solid consumer spending and a healthy job market.
The stock market is now betting the Fed can achieve a “soft landing,” where the economy slows just enough to snuff out high inflation, but not so much that it falls into a recession. As a result, investors now expect the Fed to begin cutting rates as early as March.
The yield on the 10-year Treasury was at 3.88% Friday from 3.85% late Thursday. It surpassed 5.00% in October, but has been generally falling since then, easing the pressure on stocks.
