US Stocks Eye 7-Day Winning Streak As Mortgage Rates Fall Below 7%, Yields Tumble: What's Driving Markets Thursday?

It’s shaping up to be a positive Thursday on Wall Street, with risk sentiment remaining robust after the Federal Reserve effectively opened the door to rate cuts in 2024.

The S&P 500 is poised to record its seventh consecutive green session, closing in at just 1.5% away from its all-time highs. The tech-heavy Nasdaq 100 held steady, now less than a percentage point away from its record highs, while Dow’s blue-chip stocks continue to set new record highs.

Notably, small-cap stocks have rallied the most since the Federal Reserve’s meeting, with the Russell 2000 surging over 6% in the last two sessions and breaking above the 2,000-point mark, its highest level since August 2022.

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Treasury yields continue to trend lower, with the 10-year yield dropping to 3.9%, the lowest since late July. Meanwhile, 30-year yields are edging toward 4%, with the iShares 20+ Year Treasury Bond ETF TLT gaining 2%.

Lower Treasury yields are also driving down mortgage rates, with the 30-year fixed average rate falling to 6.95% as of Dec. 13, according to Freddie Mac data, dipping below 7% for the first time since August.

In response, real estate stocks were the top performers among the S&P 500’s sectors.

In the currency market, the dollar continued to weaken against the euro, as the latter received a more hawkish stance from the European Central Bank, which decided to keep rates unchanged and pushed back against early speculations of rate cuts.

Gold, tracked by the SPDR Gold Trust GLD, continues its ascent, now reaching $2,045 per ounce. Crude oil, as tracked by the U.S. Oil Fund USO, rose by 3.6% to $72 a barrel.

Bitcoin BTC/USD also saw gains, rising by 0.8% to reach $43,180.

Thursday Performance In Major US Indices, ETFs

The SPDR S&P 500 ETF Trust SPY was 0.4% higher to $472.39, the SPDR Dow Jones Industrial Average ETF DIA was 0.4% higher to $373.22 and the Invesco QQQ Trust QQQ edged 0.1% lower to $403.31, according to Benzinga Pro data.

Sector-wise, the Real Estate Select Sector SPDR Fund XLRE rallied 3.1%. Energy, as tracked by the Energy Select Sector SPDR Fund XLE, also rallied, up 2.8%. Utilities and consumer staples were the laggards, down 0.4% and 0.5%, respectively.

Among industries, solar stocks, as tracked by the Invesco Solar ETF TAN, rocketed nearly 9%. Insurance services lagged, with the SPDR S&P Insurance ETF KIE down 1.3%.

Stocks In Focus

• SolarEdge Technologies, Inc. SEDG, Enphase Energy Inc. ENPH and First Solar Inc. FSLR rose 16%, 12% and 9% respectively, as investors flocked to rate-sensitive stocks following the Fed’s pivot.
• Moderna Inc. MRNA rallied over 10% as the company announced positive trial results for an experimental mRNA-based treatment for skin cancer.
• Align Technology Inc. ALGN soared by 12% following the announcement that Health Canada has updated the company’s medical device license for its Invisalign palatal expander system.
• Lucid Group Inc. LCID rallied 15%, after the company disclosed it manufactured about 800 electric vehicles (EVs) at its Saudi Arabian facility.
• Apellis Pharmaceuticals Inc. APLS fell 25%, after Wedbush and Wells Fargo downgraded the stock and the price target.
• Shares of TPI Composites TPIC surged nearly 70% upon the company’s declaration of entering into a definitive agreement with funds managed by Oaktree Capital Management.

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