Stocks end the second to last trading day of the year with a strong showing, while Treasuries and the dollar both fell—erasing recent gains and providing a bit of optimism for the year ahead.
- The S&P 500 Index rose 1.75%
- The Dow Jones Industrial Average was up 1.05%
- The tech-heavy Nasdaq Composite shot up 2.54%
- Yields on 10-year Treasuries fell six basis points
why it’s important
The stock market has been volatile and poorly performing in December, when many thought otherwise. Today’s boost erased recent gains—pointing to optimism for 2023.
U.S. stocks rose in a broad-based rally and Treasury yields fell as data allayed fears of a supercharged jobs market that would support a more aggressive policy path. One reading of the dollar fell.
The S&P 500 Index notched its biggest one-day gain this month—in thin holiday trading, to regain all of the losses from the previous two days. The tech-heavy Nasdaq 100 outperformed, with recently sagging Tesla climbing more than 8% and tech stalwarts Apple (2.86%), Amazon (2.88%), and Microsoft (2.76%) showing strength.
Yields on 10-year Treasuries fell six basis points, halting a week-long, 20-basis-point climb that weighed on risk sentiment. The dollar fell.
Investors liked U.S. jobs data that failed to reveal bad news, while underscoring the resilience of the labor market in the face of the Federal Reserve’s continued rate hikes. Initial unemployment claims rose slightly to 225,000, following expectations—the most since early February.
The rally is a ray of light as a dismal year for stocks and bonds draws to a close. Global equities have lost a fifth of their value in 2022, the largest decline since 2008 on an annual basis, with tech bearing the brunt of the selloff.