S&P 500 rises to highest close of 2023 amid rate cut hopes

NEW YORK, Dec 1 (Reuters) – The benchmark S&P 500 index ( .SPX ) closed at its highest level of the year on Friday, amid growing optimism that the Federal Reserve has raised U.S. interest rates and may start to taper inflation next year. It’s getting cold.

The index rose 26.83 points, or 0.59%, to close at 4,594.63 points, and closed at 4,588.96 on July 31, its previous high of 2023.

U.S. stocks posted better-than-expected earnings declines for three consecutive months in November, adding to challenges that the central bank is at the end of its monetary tightening campaign, evidence of easing inflation.

The S&P 500 got another boost on Friday when Federal Reserve Chairman Jerome Powell vowed to move “cautiously” on interest rates, describing the risks of going too far with tightening as “overbalanced” with risks not curbing inflation.

“Markets see today’s comments as moving towards the bearish camp,” Jeffrey Roach, chief economist at LPL Financial in Charlotte, North Carolina, said in an email. “A few weeks ago, Powell said policy was tight, but today, he believes policy is ‘within tight territory.’ I think it’s reasonable for markets to take that nuance.”

Reported by Amruta Khandekar; Editing by Chisu Nomiyama and Lisa Schumacher

Our Standards: Thomson Reuters Trust Principles.

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