Wall Street Today | Dow Clings to Record As Stocks Rise

U.S. stocks rose Monday as benchmark borrowing costs traded near their lowest since the summer, with the S&P 500 edging toward its all-time high and the Dow Jones Industrial Average attempting to push further into record territory.

The S&P 500 started the last full trading week of the year at its best level in nearly two years, less than 2% from its record high. The equity benchmark has delivered a seven-week winning streak- the best such run in six years - gaining 14.6% amid hopes the Federal Reserve will start cutting interest rates next year.

"Decelerating inflation and Fed easing will keep real yields low and support a P/E [price/earnings] multiple greater than 19 times," Kostin and his team told clients in a report published late Friday.

He noted that since late October, the S&P 500 and the Russell 2000 RUT have gained a respective 15% and 23% as real rates have dropped to 1.7% from 2.5%. The bank's prior 2024-end S&P 500 forecast assumed yields of 2.3% and a P/E of 18 times. The real rate is the nominal rate - what an investor gets from the 10-year U.S. treasury bond - minus inflation.

West Texas Intermediate, the U.S. benchmark, added 1.9% to $72.79 a barrel. Brent crude, the international standard, also increased 1.9% to $78.08 a barrel.

BP said the transit through the Red Sea, which links up to the Suez Canal in the Middle East, would be temporarily suspended. In a separate development pushing prices higher, Russia said Sunday that it may reduce crude output this month by an additional 50,000 barrels a day or more.

On the other hand, concerns about the outlook for energy demand are still weighing on oil prices, which have dropped 10% this year. Economic growth looks to weaken in 2024 after the most aggressive interest-rate increases in decades from the Federal Reserve.