US Session Market Wrap: Investors Return to the Market to End a Five-Day Losing Streak

Investors were finally prompted to buy after a pullback following a volatile week, signaling that the five-day losing streak — the longest since April — may be coming to an end. Wall Street stocks were led higher by the technology sector, with the Nasdaq 100 rising by as much as 1.4%, while the S&P 500 gained 1%. Among individual stocks, Freddie Mac and Fannie Mae traded near eight-year highs after plans were announced to release these mortgage giants from government oversight. United States Steel Corp. dropped 6.8% after President Joe Biden blocked Nippon Steel Corp.’s proposal to buy the company.

The S&P 500 posted intra-day gains over the previous two sessions but closed lower, as investors weighed data showing that the world’s largest economy remains strong, against expectations of slower rate cuts by the Federal Reserve. On Friday, data showed that U.S. manufacturing grew at a moderate pace in December. The Institute for Supply Management (ISM) indicator reached 49.3, surpassing expectations but remaining below 50, a level that signals economic growth. New orders rose to their highest level since early last year.

U.S. government bonds fell following the report, while stocks held on to their gains. Adam Crisafulli of Vital Knowledge noted that the ISM data is “slightly positive” but “will heighten concerns about aggressive policy and high yields.” A key vote later in the afternoon regarding the election of the Speaker of the House could cause additional fluctuations.

The standoff over Mike Johnson’s candidacy for the position will signal how united the Republican Party is behind the president-elect’s plans when he takes office in the coming weeks. “We really need to see more clarity by January 20 to give markets greater confidence,” said Laura Cooper, global investment strategist at Nuveen, in an interview with Bloomberg Television. “U.S. exceptionalism will remain the dominant theme at least through the first half of the year, regardless of the policies that are implemented.”