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By Chuck Mikolajczak

NEW YORK (Reuters) -A gauge of global stocks was poised to snap a four-session winning streak on Monday while Treasury yields rose as investors awaited U.S. labor market data to indicate the likely route of the Federal Reserve’s rate policy.

Softening economic data and recent comments from Fed officials, including Chair Jerome Powell, have heightened expectations that the U.S. central bank has ended its interest-rate-hiking cycle and will begin to cut rates as soon as March. The next Fed policy meeting is scheduled to take place on Dec. 12-13.

Expectations for a U.S. rate cut of at least 25 basis points (bps) in March are nearly 60%, according to CME’s FedWatch Tool, up from about 22% a week ago.

The increasing belief that the Fed will ease policy has helped fuel a strong rally in U.S. stocks. Each of the three major indexes on Wall Street capped a fifth straight week of gains on Friday, with the benchmark S&P index notching its highest close of the year.

“There is a lot of chop around here that is not necessarily meaningful,” said Tom Martin, a senior portfolio manager at GLOBALT Investments in Atlanta.

“We have a really important Fed meeting coming up, and what makes it important is that all of a sudden, the market has decided that they’re going to cut early next year.”

On Wall Street, the Dow Jones Industrial Average closed down 41.06 points, or 0.11%, to 36,204.44, the S&P 500 lost 24.85 points, or 0.54%, to 4,569.78 and the lost 119.54 points, or 0.84%, to 14,185.49.

U.S. labor market data will kick off on Wednesday with the ADP National Employment Report on the private sector and culminate on Friday with the government’s wider payrolls report.

Data on Monday showed new orders for U.S.-made goods fell more than expected in October, marking the biggest monthly drop in roughly three and a half years.

U.S. Treasury yields moved higher, with the benchmark 10-year yield moving off three-month lows to stand 4 basis points higher at 4.261%. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, rose 7 basis points to 4.633%.

Stocks in Europe also edged lower, with the pan-European STOXX 600 index closing down 0.09% after initial gains pushed it to a four-month high. MSCI’s gauge of stocks across the globe was down 0.43% after hitting its highest level since Aug. 2 earlier in the day.

Attacks on commercial vessels in the Red Sea on Sunday risked increasing investor worries about the potential for a widening of the war between Israel and Hamas, potentially complicating the outlook for a rally that saw U.S. stocks crest a fresh closing high for the year last week.

Crude prices were lower as investor skepticism over the latest OPEC+ decision on supply cuts and uncertainty surrounding global fuel demand outweighed the risk of supply disruptions from the Middle East conflict.

U.S. crude settled down 1.39% to $73.04 a barrel. Brent crude ended at $78.03 per barrel, down 1.08%.

The dollar rebounded, bouncing after three straight weeks of declines. The dollar index, which tracks the greenback against a basket of six currencies, gained 0.5%, to 103.62. The euro was down 0.42% at $1.0835.

The bounce in the dollar weighed on gold, which pulled back after hitting a record high of $2,135.40 per ounce and was last down 2.05% to $2,028.42 an ounce.

(Reporting by Chuck Mikolajczak; additional reporting by Amruta Khandekar, Shristi Achar A in Bengaluru and Noel Randewich in San Francisco; editing by Christina Fincher and Leslie Adler and Marguerita Choy)

By Noel Randewich and Shristi Achar A

(Reuters) – U.S. stocks ended lower on Monday, interrupting last week’s rally, as investors turned cautious ahead of employment data due this week that could alter expectations that the Federal Reserve will cut interest rates early next year.

The S&P 500 receded, with megacaps Microsoft, Apple, Nvidia and Amazon dipping over 1%, pressured by higher U.S. Treasury yields, which made returns on stocks less attractive.

The S&P 500 registered its highest close of the year on Friday as remarks from Fed Chair Jerome Powell acknowledged the central bank’s need to “move forward carefully” amid signs of economic softening, comments that bolstered expectations the Fed has finished raising rates.

Small-cap stocks rose on Monday, with the Russell 2000 rallying about 1% and bringing its gain this year to almost 7%.

“There is a lot of chop around here that is not necessarily meaningful,” said Tom Martin, a senior portfolio manager at GLOBALT Investments in Atlanta.

“We have a really important Fed meeting coming up, and what makes it important is that all of a sudden, the market has decided that they’re going to cut early next year.”

The S&P 500 declined 0.54% to end the session at 4,569.78 points.

The Nasdaq declined 0.84% to 14,185.49 points, while Dow Jones Industrial Average declined 0.11% to 36,204.44 points.

Volume on U.S. exchanges was relatively heavy, with 12.7 billion shares traded, compared to an average of 10.6 billion shares over the previous 20 sessions.

Ride-hailing service Uber Technologies rallied 2.2% after an announcement on Friday it will join the S&P 500 effective Dec. 18.

Shares of Alaska Air Group tumbled 14% after the carrier said on Sunday it would acquire peer Hawaiian Holdings for $1.9 billion, including debt. Hawaiian’s shares nearly tripled in value, helping lift the Russel index.

This week’s main macroeconomic focus will be Friday’s jobs report for November, which may help investors gauge the Fed’s likely interest rate path, as well as the potential for a “soft landing” – where the Fed manages to bring inflation under control while averting a recession.

Traders widely expect the central bank will keep rates unchanged at its meeting next week. Interest rate futures suggest a 58% probability the Fed will start cutting rates by March 2024, according to the CME Group’s FedWatch tool.

However, some analysts warn that markets have been too quick to price in lower interest rates.

Adding to declines on Monday were renewed fears about a widening of the war in Israel and Gaza after an attack on three commercial vessels in the southern Red Sea.

Shares of cryptocurrency firms such as Coinbase Global, Riot Platforms and Marathon Digital rallied between 5% and 9% after bitcoin crossed $40,000 for the first time this year.

Advancing issues outnumbered falling ones within the S&P 500 by a 1.0-to-one ratio.

The S&P 500 posted 38 new highs and no new lows; the Nasdaq recorded 125 new highs and 63 new lows.

The S&P 500 has gained 19% so far in 2023, while the Nasdaq has recovered 24%.

(Reporting by Amruta Khandekar and Shristi Achar A in Bangalore, and by Noel Randewich in Oakland, Calif.; Editing by Anil D’Silva, Pooja Desai and Aurora Ellis)

By Hannah Lang

WASHINGTON (Reuters) -The dollar ticked higher on Monday, regaining some ground after falling for three straight weeks on bets that the U.S. Federal Reserve will soon be cutting interest rates, while bitcoin breached $42,000 for the first time since early 2022.

The dollar index, which tracks the currency against six major peers, rose by 0.54% to 103.67, while the euro was last down 0.49% to $1.0828

“We’re kind of seeing a rebound and reshaping of expectations back to what we expected towards the end of the year,” said Helen Given, FX trader, at Monex USA in Washington.

Fed Chair Jerome Powell said on Friday that the central bank was prepared to tighten policy further if needed, but also said that interest rates were “well into restrictive territory” and were slowing inflation.

“Yes, he said that interest rate hikes are done, but that was already kind of baked in the cake when it comes to the Fed,” said Given. “The more important side of the coin that we saw was that he laid down the law and said that cuts are not coming anytime soon.”

In cryptocurrencies, bitcoin ripped to its highest since April 2022 at more than $42,100, buoyed by expectations that U.S. regulators will soon approve an exchange-traded bitcoin fund. It was last at $41,912.

“An approval is expected to bring short-term capital influx from the traditional finance investors, fueling the uptrend, while a rejection might trigger a short-term negative price action due to high expectations of approval by market participants,” said Matteo Greco, a research analyst at fintech investment firm Fineqia International, in a note.

Investors’ bets that the Fed’s rate-hiking cycle is over have also boosted riskier assets in financial markets. The key data point for investors this week is the November U.S. jobs report, which is expected to show the American economy added 180,000 jobs last month, up from 150,000 in October.

Last month, the euro rallied 3% against the dollar and hit its highest since August at more than $1.10 as data showed U.S. inflation was cooling rapidly. The dollar index dropped 3.1% in November in its biggest monthly fall in a year.

“A lot of people are … realizing that the strength of the euro, primarily because of the U.S. weakness to this point, is now potentially an inflection point,” said Eugene Epstein, Moneycorp’s head of structured products, North America. “The tone of the conversation seems to have shifted a little bit in that direction.”

Sterling was at $1.262, down 0.6% on the day, while the Australian dollar was 0.88% lower at $0.66140. The U.S. dollar also rose against the Swiss franc, last up 0.41%.

The dollar was last down 0.33% against the yen at 147.300, after falling to 146.24 yen per dollar in the Asian session, its lowest since mid-September.

Data on Monday showed that exports from Germany unexpectedly fell in October, denting hopes that Europe’s biggest economy was stabilising.

Euro zone retail sales data are due on Wednesday, ahead of Chinese trade figures on Thursday.

(Reporting by Hannah Lang in Washington; additional reporting by Harry Robertson in London and Brigid Riley in Tokyo; Editing by Marguerita Choy and Alison Williams)

By Chuck Mikolajczak

NEW YORK (Reuters) -A gauge of global stocks fell for the first time in five sessions on Monday while Treasury yields rose as investors awaited U.S. labor market data to gauge the likely route of the Federal Reserve’s rate policy.

Softening economic data and recent comments from Fed officials, including Chair Jerome Powell, have heightened expectations that the U.S. central bank has ended its interest-rate-hiking cycle and will begin to cut rates as soon as March.

Expectations for a U.S. rate cut of at least 25 basis points (bps) in March are about 58%, according to CME’s FedWatch Tool, up from about 22% a week ago.

Expectations that the Fed will ease policy have helped fuel a strong rally in U.S. stocks. Each of the three major indexes on Wall Street capped a fifth straight week of gains on Friday, with the benchmark S&P index notching its highest close of the year.

“No one expects any more rate hikes at this point,” said Joe Saluzzi, partner and co-founder at Themis Trading in Chatham, New Jersey.

But, he added, “I don’t see them cutting unless you start to see some really significant poor numbers coming into the economy, which we haven’t seen yet.”

The Dow Jones Industrial Average fell 75.40 points, or 0.21%, to 36,169.92; the S&P 500 lost 32.30 points, or 0.70%, to 4,562.33; and the lost 154.11 points, or 1.08%, to 14,150.92.

U.S. labor market data will kick off on Wednesday with the ADP National Employment Report on the private sector and culminate on Friday with the government’s wider payrolls report.

Data on Monday showed new orders for U.S.-made goods fell more than expected in October, marking the biggest monthly drop in roughly three and a half years,

Stocks in Europe also edged lower, with the pan-European STOXX 600 index closing down 0.09% after initial gains pushed it to a four-month high. MSCI’s gauge of stocks across the globe was down 0.56% after hitting its highest level since Aug. 2 earlier in the day.

Attacks on commercial vessels in the Red Sea on Sunday risked increasing investor worries about the potential for a widening of the war between Israel and Hamas, potentially complicating the outlook for a rally that saw U.S. stocks crest a fresh closing high for the year last week.

Crude prices were lower as investor skepticism over the latest OPEC+ decision on supply cuts and uncertainty surrounding global fuel demand outweighed the risk of supply disruptions from the Middle east conflict.

U.S. crude settled down 1.39% to $73.04 a barrel. Brent crude settled at $78.03 per barrel, down 1.08%.

The dollar rebounded, bouncing after three straight weeks of declines. The dollar index, which tracks the greenback against a basket of six currencies, gained 0.61%, to 103.73. The euro was down 0.55% at $1.0821.

The bounce in the dollar weighed on gold, which pulled back after hitting a record high of $2,135.40 per ounce and was last down 2.13% to $2,026.89 an ounce.

U.S. Treasury yields moved higher, with the benchmark 10-year yield moving off three-month lows to stand 7 basis points higher at 4.29%. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, rose 3 basis points to 4.47%.

(Reporting by Chuck Mikolajczak; additional reporting by Amruta Khandekar and Shristi Achar A in Bengaluru; editing by Christina Fincher and Leslie Adler)

By Jonathan Saul

LONDON (Reuters) – War risk insurance premiums edged up for Red Sea voyages after three vessels were attacked in the area on Sunday and fears grow over worsening perils for commercial shipping, maritime and insurance sources said on Monday.

The incidents are the latest in a series of attacks in Middle Eastern waters since a brutal war between Israel and the Palestinian Islamist group Hamas broke out on Oct. 7.

The three commercial vessels came under attack in international waters in the southern Red Sea, the U.S. military said on Sunday.

Yemen’s Iran-backed Houthi group claimed drone and missile attacks on what it said were two Israeli vessels in the area.

“It has now become clear the Houthis will attack anything at sea with links to Israel or Israelis, regardless of how feeble the links may be, and regardless of the potential for collateral damage to non-Israelis, for example crew members,” Jakob Larsen, head of maritime safety & security with shipping association BIMCO, told Reuters.

Israeli military spokesperson Rear Admiral Daniel Hagari said the two ships cited by the Houthis had no connection to Israel. U.S. Central Command said the three vessels were connected to 14 separate nations.

Larsen said the industry would welcome a strengthened naval presence in the area.

“Faced with a threat from military formations such as the Houthis, merchant ships rely on protection from naval units,” he said.

“There is little a merchant ship can do to protect itself against weapons of war. Re-routing away from the area is a valid consideration, especially for ships at heightened risk.”

LONGER ROUTES

Israeli container line Zim said last week it was diverting some of its vessels away from the area, meaning longer journey times, as a temporary measure.

The London insurance market has listed the southern Red Sea among its high risk areas and ships need to notify their insurers when sailing through such areas and also pay an additional premium typically for a seven-day cover period.

Insurance industry sources said that war risk premiums had stayed firm on Monday at between 0.05% to 0.1% of the value of a ship, from around 0.03% estimated last week before the attacks. This translates into tens of thousands of dollars of additional costs for a seven-day voyage.

Transportation costs in this region are expected to rise further, said Corey Ranslem, CEO of British maritime risk advisory and security company Dryad Global.

“The escalation in insurance premiums will contribute to higher costs,” he said.

“Additionally, the increase in perceived risk may lead to a significant number of vessels opting to by-pass the region altogether, preferring longer routes such as circumnavigating the Horn of Africa.”

The U.S. military said on Sunday it would “consider all appropriate responses in full co-ordination with its international allies and partners”.

Ships sailing under the Bahamas flag registry have been among the vessels hit in the various attacks.

The Bahamas delegation told an already scheduled assembly session of the U.N. shipping agency in London on Monday that what was emerging was a “deliberate attack on international shipping” in a critical region.

“Whether you are directly involved in this aspect, all of us eventually pay for it – every nation that depends on international shipping,” the Bahamas delegation said.

In January, shipping associations scaled back risk assessments in the Indian Ocean, which the Rea Sea leads into, after Somali piracy was brought under control.

(Reporting by Jonathan Saul; Editing by Alison Williams)

(Reuters) – Altivia Chemical was working to contain a toxic gas leak from its LaPorte, Texas, plant on Monday, as the city’s emergency management agency ordered some nearby residents and five neighboring facilities to shelter in place out of caution.

Halliburton’s Multi-Chem Bayport site, Stepan’s Pasadena facility, and three others belonging to Kuraray Americas, Evonik, and NCTI, were sheltering in place after the offsite release of a toxic gas called phosgene, according to community alerts.

Located about 30 miles (48 km) east of Houston, La Porte’s Office of Emergency Management (LPOEM) said the city issued a cautionary shelter-in-place until the amount of phosgene released is determined.

“A chemical emergency has occurred and residents south of Fairmont between Bay Area and S. 16th Street need to immediately shelter in place,” LPOEM said on X, formerly Twitter.

Altivia could not immediately be reached for comment.

Phosgene is a colorless gas with a suffocating odor like musty hay that is used in the manufacture of other chemicals, pesticides, and pharmaceuticals, according to the U.S. Centers for Disease Control and Prevention.

Exposure to phosgene may cause vomiting, breathing difficulty, chest pain and, when liquid, frostbite.

(Reporting by Deep Vakil in Bengaluru; Editing by Chris Reese and Bill Berkrot)

By Noel Randewich and Shristi Achar A

(Reuters) – U.S. stocks dipped from recent highs on Monday, with investors turning cautious ahead of employment data due this week that could alter expectations that the Federal Reserve will cut interest rates early next year.

All three major indexes receded, with megacaps Microsoft, Apple, Nvidia and Amazon dropping between 1% and 3%, pressured by higher U.S. Treasury yields, which made returns on stocks less attractive.

Wall Street has rallied in recent weeks, buoyed by robust corporate earnings and expectations that the Fed will start cutting rates as soon as March.

The S&P 500 registered its highest close of the year on Friday as remarks from Fed Chair Jerome Powell acknowledged the central bank’s need to “move forward carefully” amid signs of economic softening, comments that bolstered expectations the Fed has finished raising rates.

Small-cap stocks rose on Monday, with the Russell 2000 up 0.65%, bringing its gain this year to over 6%, far less than the S&P 500’s 19% recovery over the same period.

“There is a lot of chop around here that is not necessarily meaningful,” said Tom Martin, a senior portfolio manager at GLOBALT Investments in Atlanta.

“We have a really important Fed meeting coming up, and what makes it important is that all of a sudden, the market has decided that they’re going to cut early next year.”

Ride-hailing service Uber Technologies rallied 3.4% after an announcement on Friday it will join the S&P 500 effective Dec. 18.

Shares of Alaska Air Group tumbled 15% after the carrier said on Sunday it would acquire peer Hawaiian Holdings for $1.9 billion, including debt. Hawaiian’s shares nearly tripled in value, helping lift the Russel index.

This week’s main macroeconomic focus will be Friday’s jobs report for November, which may help investors gauge the Fed’s likely interest rate path, as well as the potential for a “soft landing” – where the Fed manages to bring inflation under control while averting a recession.

Traders widely expect the central bank will keep rates unchanged at its meeting next week. Interest rate futures suggest a 58% probability the Fed will start cutting rates by March 2024, according to the CME Group’s FedWatch tool.

However, some analysts warn that markets have been too quick to price in lower interest rates.

Of the 11 S&P 500 sector indexes, seven declined, led lower by communication services, down 1.7%, followed by a 1.55% loss in information technology.

The S&P 500 was down 0.70% at 4,562.68 points.

The Nasdaq declined 1.09% to 14,149.33 points, while the Dow Jones Industrial Average was down 0.20% at 36,172.89 points.

Adding to declines on Monday were renewed fears about a widening of the war between Israel and Gaza after an attack on three commercial vessels in the southern Red Sea.

Shares of cryptocurrency firms such as Coinbase Global, Riot Platforms and Marathon Digital rallied over 7% as bitcoin crossed $40,000 for the first time this year.

Declining stocks outnumbered rising ones within the S&P 500 by a 1.2-to-one ratio.

The S&P 500 posted 38 new highs and no new lows; the Nasdaq recorded 107 new highs and 53 new lows.

(Reporting by Amruta Khandekar and Shristi Achar A in Bangalore, and by Noel Randewich in Oakland, Calif.; Editing by Anil D’Silva, Pooja Desai and Aurora Ellis)

(Reuters) -Cryptocurrency-related stocks listed in the U.S. surged on Monday, looking to extend their strong November gains, as bitcoin topped $42,000 to hit a fresh high for the year.

Shares of companies whose fortunes are tied to the cryptocurrency have rallied in recent weeks, spurred by optimism about potential interest rate cuts in the U.S. as well as traders betting on the imminent approval of U.S. stock market-traded bitcoin funds.

Bitcoin climbed 4.1% to $41,649- its highest since April 2022. It had hit $42,162 earlier in the session.

“The impact of an (ETF) approval is going to be big in terms of investment appetite because it’s going to be more easily regulated, more attractive and easier to invest,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.

“What we have right now is a risk rally, and bitcoin is also benefiting big time from falling yields. There is also this positive bullish sentiment into next year because it is going to be the year of halving.”

Halving is a process designed to slow the release of bitcoin, and bitcoin prices have typically rallied following halvings.

Coinbase jumped 7.5%. The stock rose nearly 62% in November, even as the crypto exchange reported a decline in third-quarter trading volumes.

Bitcoin investor Microstrategy, which bought bitcoins worth $593 million last month, gained 8.2%.

Bitcoin miners such as Riot Platforms, Marathon Digital and CleanSpark jumped between 10.3% and 18.8%, respectively, adding to their double-digit gains in November.

The ProShares Bitcoin Strategy ETF, which tracks bitcoin futures, rose 7.7% and looked set to touch an over one-year high, while the ProShares Short Bitcoin Strategy ETF that allows traders to bet on a fall in bitcoin futures fell 7.7%.

Investor sentiment toward cryptocurrencies and related assets had been lukewarm earlier this year after a string of high-profile collapses in 2022 led to outflows of more than a trillion dollars from the sector.

However, the recent rally has sent bitcoin up more than 150% so far in 2023, on course for its best annual performance since 2020.

(Reporting by Sruthi Shankar and Amruta Khandekar in Bengaluru; Editing by Tasim Zahid)

By Blake Brittain

WASHINGTON (Reuters) -A U.S. appeals court on Monday threw out a $2.18 billion patent-infringement award won by patent owner VLSI Technology against Intel Corp, overturning one of the largest verdicts in the history of U.S. patent law.

The U.S. Court of Appeals for the Federal Circuit reversed the jury’s 2021 verdict that Intel infringed one VLSI patent, and sent the case back to Texas for a new trial to determine how much Intel owes for infringing a second VLSI patent.

Patent holding company VLSI is owned by investment funds managed by Fortress Investment Group. Abu Dhabi’s Mubadala Investment Co agreed to acquire a majority share of Fortress from Japan-based Softbank Group Corp this year.

Representatives for VLSI did not immediately respond to requests for comment on the decision.

An Intel spokesperson said the company was pleased with the ruling and will argue at the new damages trial that VLSI’s patent is “of little value.”

VLSI has sued Intel in multiple U.S. courts, accusing it of infringing several patents covering semiconductor technology.

A jury in Waco, Texas awarded VLSI $2.18 billion in the first trial from the dispute. The jury found that technology in Intel microprocessors infringed patents that VLSI had acquired from Dutch chipmaker NXP Semiconductors.

The Federal Circuit on Monday ruled that there was insufficient evidence for the jury to have found that Intel infringed one of the two patents at issue, which had accounted for $675 million of the verdict.

The Washington-based appeals court affirmed that Intel infringed another VLSI patent, but said that problems with the damages analysis justified a new trial to determine the proper award.

The jury had awarded VLSI $1.5 billion in damages for Intel’s infringement of the patent.

Intel stock was down more than 4% on Monday morning. Other major chipmakers were also seeing declines.

Intel defeated VLSI’s bid for more than $3 billion in damages in another Waco jury trial later in 2021. A separate jury in Austin, Texas decided that VLSI was entitled to nearly $949 million from Intel in a third patent case last year.

The companies later agreed to dismiss another potential multi-billion-dollar case in Delaware. Another trial in Northern California is set to begin in 2024.

(Reporting by Blake Brittain in WashingtonEditing by David Bario, Will Dunham, Chizu Nomiyama and Sharon Singleton)

By Saqib Iqbal Ahmed

NEW YORK (Reuters) – The bull is nearly loose.

The S&P 500’s feverish late-year rally has brought the index to its highest closing level of 2023, leaving it just 4.2% away from the all-time peak reached in January 2022.

A close above 4,796.56 on the S&P 500 would confirm that the index has been in a bull market since bottoming out on Oct. 12, 2022, by one commonly used definition. The benchmark index is up 19.7% for the year and has risen 28.5% from its October 2022 low.

A look at bull markets of the past suggests that investors should expect stocks to take a breather before marching higher.

At the same time, plenty of obstacles remain for U.S. stocks, including the possibility that the Fed’s rate hikes chill the economy, upending the soft-landing hopes that have propelled equities higher.

SMALLER THAN YOUR AVERAGE BEAR

With the S&P 500 closing at a new year-high on Friday investors are close to getting confirmation that the bear market that started in January 2022 is over.

Some investors define a bear market specifically as a decline of at least 20% in a stock or index from its previous peak. By that definition, the bear market that began when the S&P 500 hit its previous record on Jan. 3, 2022 was not particularly painful.

The S&P 500 closed down 25.4% at its lowest point, making this the fourth shallowest bear market experienced by the index since 1928, according to data from Yardeni Research.

At the same time, at 282 calendar days, it was somewhat shorter than the average bear market length of 341 days, based on data from Yardeni Research going back to 1928.

STRONG LIKE BULL

History also suggests that bull markets tend to feed off themselves, as strong stock performance pulls investors off the sidelines and boosts appetite for risk.

Over the past 50 years, stocks have witnessed an average gain of nearly 260% during the six bull markets that have occurred.

NOT SO FAST

Of course, stocks rarely rise in a straight line. Over the last 50 years, the S&P 500 has risen an average of 16% in the three-month period leading up to a bull market.

By contrast, the S&P 500 has logged average gains of just 0.2% and 2.0%, in the one-month and three-month period after a bull market is confirmed.

SPEED BUMPS AHEAD?

At the same time, there is no shortage of factors that could slow a rally or hurt investor confidence.

Many investors are watching the U.S. economy: Expectations of an economic soft-landing, where the Fed manages to cool inflation without badly hurting growth, have supported the rally in stocks. But signs that the Fed’s 525 basis points of rate increases are slowing growth more than expected could argue for a more cautious approach to stocks and other so-called risky assets.

One recession signal, the inverted yield curve, continues to hang over investors. Yields on two-year Treasuries have stood above those on 10-year Treasuries since July 2022. The 2/10 year yield curve has inverted six to 24 months before each recession since 1955, a 2018 report by researchers at the San Francisco Fed showed.

(This story has been refiled to clarify that the reference to new year high is on a closing basis in paragraph 2)

(Reporting by Saqib Iqbal Ahmed; Editing by Ira Iosebashvili and Lisa Shumaker)