Dow continues rally, closes up 100 points after strong economic data, hopes for falling rates: Live updates

Stocks closed higher on Thursday, with the Dow Jones Industrial Average continuing its rally after notching its best ever close a day earlier.

The 30-stock Dow gained 158 points, or 0.4%, to close at 37,248.35. The S&P 500 added 0.3% to finish the session at 4,719.55, while the Nasdaq Composite gained 0.2% to 14,761.56.

— Brian Evans

Bank stocks may outperform the rest of the U.S. stock market in 2024 as they did in 1995 — when they soared 54% to the S&P 500's 34% advance, according to RBC Capital analysts led by Gerard Cassidy in a 124-page report out Thursday.

"In the second half of 2024, we see continued improvement in the fundamentals as the Federal Reserve gradually lowers the Federal Funds rate, loan growth starts to accelerate, loan loss provisions begin to fall and capital return through share repurchases begins to accelerate," RBC said.

Until the bank stocks outperform, they'll continue to offer solid income, Cassidy wrote. "Going forward, we expect dividends will be maintained or increased over the next 12-18 months, which is a significant contrast to 2008-09 when 18 out of the top 20 banks either cut or eliminated their dividends."

Regional banks that had seen sharp declines earlier in 2023 have soared this week after Federal Reserve policymakers acknowledged that lower interest rates are in store — three in 2024. While the SPDR S&P Regional Banking ETF is ahead 9.4% this week and almost 19% in December, many individual banks have done ever better. Western Alliance Bancorp has risen 17% this week and 29% this month; Citizens Financial has climbed 14% and 24%; Columbia Banking System has gained 11% and 24%.

— Scott Schnipper

2023's narrow market rally doesn't concern, Deutsche Bank chief U.S. equity and global strategist Bankim Chadha. The 'Magnificent Seven' stocks that have outperformed this year were the same stocks that sold off last year, Chadha told CNBC's "Power Lunch" on Thursday.

"So why would we expect everybody else to rally when they didn't really fall that much?" said Chadha, referring to stocks outside the mega cap tech sphere.

Chadha, who has a 5,100 base case for the S&P 500 in 2024, believes growth may be in other areas besides the large cap tech names next year.

"I wouldn't be short on [mega cap tech] because they do grow their earnings a lot faster than everybody else does. But we are looking for the rally to broaden so I would look elsewhere for now," Chadha said.

— Hakyung Kim

Mega cap tech names lagged behind the market, inching into negative territory amid broader market gains.

Microsoft and Netflix fell around 2.3% as of Thursday afternoon. Amazon and Alphabet declined 1.1% and 0.9%, respectively. Apple and Meta Platforms also saw their shares decline by 0.2% and 0.5%, respectively.

Meanwhile, the S&P 500 was up 0.2%, while the Nasdaq Composite inched up 0.1%.

— Hakyung Kim

Oil prices settled 3% higher on Thursday on a weaker dollar and slight upgrade to demand growth in 2024.

The West Texas Intermediate contract for January gained $2.11, or 3.04%, to settle at $71.58 a barrel, while the Brent contract for February rose $2.35, or 3.16%, to settle at $76.61 a barrel.

The U.S. dollar also dropped to a four-month low Thursday after the Federal Reserve indicated the rate hikes were over. A weaker dollar makes oil cheaper, which can lift demand.

And the International Energy Agency on Thursday said global oil demand would grow by 1.1 million barrels per day in 2024, up slightly from its previous forecast of 930,000 barrels per day.

— Spencer Kimball

Former Dallas Federal Reserve President Robert Kaplan cautioned Thursday against reading too much into his former colleagues' actions this week.

Specifically, he addressed comments from Chair Jerome Powell, who said the Fed is now looking into how restrictive it wants to be on policy now that inflation is receding and the economy has avoided recession.

"This was a conversation destined to happen. He had to preview it at some time, and chose yesterday," Kaplan said during an interview on CNBC's "Squawk on the Street." "People should not overreact to what he said. He left his options open. He thinks they're done, it's likely the next move will be down, but he's keeping his options open."

—Jeff Cox

The Dow reached historical levels on Wednesday as investors cheered the latest Federal Reserve policy announcement.

Now, traders are wondering where the blue-chip index and its 30 members will go next. CNBC Pro screened to find which of the best 2023 Dow performers Wall Street sees as having more room to run — and which could be in for a correction.

CNBC Pro subscribers can click here to read the story.

— Alex Harring

Small-cap stocks rallied on Thursday as investors cheered the latest interest rate news.

The small-cap focused Russell 2000 jumped nearly 3% in midday trading. By comparison, the broad S&P 500 added a relatively modest 0.5%.

Small-caps can get a boost when there's indications of falling interest levels given the connection between rates and financing conditions. The move comes after Federal Reserve committee members penciled in three or more cuts in 2024 on Wednesday.

— Alex Harring

Intel shares added more than 2% after the company revealed a new artificial intelligence chip poised to compete with Nvidia and Advanced Micro Devices.

The chip, known as Gaudi3, is slated for launch next year. Alongside the product, Intel also unveiled Core Ultra chips for Windows laptops and PCs, and new fifth generation Xeon server chips.

AMD and Nvidia shares hovered near the flatline during midday trading.

— Samantha Subin, Kif Leswing

Shares of Charles Schwab jumped 7% on Thursday after the brokerage firm reported that its transactional sweep cash balance rose by $5.0 billion in November, its biggest monthly gain since March 2022.

Schwab's cash situation has been a concern from investors due to the large amount of "cash sorting" that has happened during the Fed's rate hike cycle, with customers moving cash into higher yield debt or money market funds. This was one of the concerns during the regional bank crisis earlier this year.

The drop in interest rates is likely also contributing to the gains for Schwab as well as regional bank stocks. The SPDR S&P Regional Banking ETF (KRE) was up nearly 5% in midday trading.

— Jesse Pound

Check out some of the companies making headlines in midday trading.

Rivian Automotive — The electric vehicle maker surged 11.2% after signing an agreement with AT&T to start a program aimed at reducing fleet emissions. Under the deal, AT&T will purchase EVs from Rivian starting early 2024.

Foot Locker — Shares of the sneaker retailer jumped 9% after Piper Sandler upgraded shares to overweight and raised the firm's price target, calling the company one of the best situated "turnaround stories." The firm said it expects Foot Locker to benefit from deflation across certain categories.

General Motors — Shares jumped 5% after GM's Cruise, the company's robotaxi startup, told CNBC it would lay off 24% of its workers.

Read the full list here.

— Brian Evans

Federal Reserve Chair Jerome Powell's dovish tone Wednesday raises the likelihood of rate cuts coming sooner than some anticipated, and improves the chances of a soft landing if inflation continues to ease, Deutsche Bank said.

"While our baseline remains that the first rate cut is likely to come in June 2024 and that the Fed will reduce rates by 175bps next year, today's meeting points to dovish risks to this expectation," Matthew Luzzetti, chief U.S. economist, wrote Wednesday in a note titled, "December FOMC: Powell breaks out punchbowl early at the holiday party."

"We see heightened risks that rate cuts could come as early as March," Luzzetti continued. "Earlier policy easing in the presence of more substantial disinflation would improve soft landing prospects."

In fact, the CME FedWatch Tool shows markets are currently pricing in a roughly 72% probability the Fed will cut rates by 0.25 percentage points in March. That's up from 65% on Wednesday.

— Sarah Min, Michael Bloom

Solar stocks popped in early Thursday trading.

The Invesco Solar ETF (TAN) climbed nearly 7%. Sunrun led the ETF higher with a gain of more than 16%. Sunnova and Maxeon followed, jumping more than 14% and 12%, respectively.

That advance marks a reprieve for solar names amid a tough year. The ETF has tumbled more than 36% in 2023 as concerns about higher interest rates weighed on the sector.

— Alex Harring

Stocks opened on higher on Thursday, with the latest retail sales data helping fuel investor hope for a soft landing.

The Dow Jones Industrial Average climbed 104 points, or 0.2%, while the S&P 500 climbed 0.4%. The Nasdaq Composite gained 0.4%.

— Brian Evans

ETF investors have a new way to follow the trading ideas of Rick Rieder, BlackRock's CIO of global fixed income.

The asset management giant is launching the BlackRock Total Return ETF on Thursday, with the ticker BRTR. The new fund has the same strategy and management team as the BlackRock Total Return Mutual Fund, which has a gold rating from Morningstar and more than $18 billion in assets.

"The idea is to model it off of the traditional total return in mutual fund format, because there are so many people that have been looking for the ETF version of this," Rieder told CNBC.

The fund is benchmarked to the Bloomberg US Aggregate Bond Index, but the managers can use up to 20% of the fund in "plus-like sectors" such as high yield loans and emerging market debt, Rieder said.

The ETF will have an expense ratio of 0.38%, matching the cost of mutual fund's K-share class.

This is the second BlackRock ETF where Rieder is a portfolio manager. The BlackRock Flexible Income ETF (BINC), which targets a specific yield range instead of total return, has already surpassed $400 million in assets after launching in May.

— Jesse Pound

The Bank of England left its benchmark interest rate unchanged on Thursday, but said it expects monetary policy "to be restrictive for an extended period of time."

England's Monetary Policy Committee noted caution in a report, however, saying "key indicators of U.K. inflation persistence remain elevated." the MPC voted 6-3 in favor of leaving rates unchanged in December.

— Brian Evans

Check out the companies making headlines before the bell.

• Adobe — Adobe fell 3.6%, continuing the stock's decline from Wednesday, after the company released disappointing guidance for fiscal year 2024.
• Foot Locker — The sneaker retailer gained 3.9% after Piper Sandler upgraded shares to overweight and raised the firm's price target, calling Foot Locker one of the best situated "turnaround stories."
• Moderna, Merck — Moderna's stock price popped more than 12% in premarket trading, while Merck's rose by 0.5%. Data from a midstage trial released Thursday showed that Moderna and Merck's experimental cancer vaccine helped reduce the risk of death or relapse in patients with melanoma cancer after three years.

For the full list, read here.

— Pia Singh

The S&P 500 could follow the Dow's suit in reaching a new record after the Fed's rate-cut projections sparked a major rally.

At Wednesday's close of 4707.09, the large-cap equity benchmark is 1.9% from its closing record of 4,796.56, and 2.4% from its intraday record high of 4,818.62. Both records were reached in early January 2022.

The tech-heavy Nasdaq Composite is 9% from its closing record and 10% from the intraday record.

— Yun Li

Shares of Merck and Moderna were up 0.7% and 6.3%, respectively, after the release of new data showing the use of Moderna's mRNA-4157 and Merck's Keytruda drugs to treat melanoma cut the risk of recurrence and death by almost 50%.

— Fred Imbert

The benchmark rate broke below 4% for the first time since August, as traders mounted bets on Fed rate cuts for 2024. The 10-year was last trading around 3.95%.

— Fred Imbert

The pan-European Stoxx 600 index was up 1.7% in early trade to hit its highest point since Jan. 2022, while Germany's DAX crossed the 17,000-point mark for the first time ever.

The Swiss National Bank on Thursday held interest rates steady at 1.75%, in line with analysts' expectations.

The Swiss central bank, which has lifted rates from negative 0.75% in a series of hikes over the last 18 months, also held its interest rate on sight deposits at 1.75%.

— Karen Gilchrist

European stocks surged at Thursday's open after the Federal Reserve's dovish signal.

The pan-European Stoxx 600 index was up 1.6% in early trade, with mining stocks jumping 3.8% to lead gains as all sectors and major bourses traded in positive territory.

Oil prices continued to rise after energy firms pulled a bigger than expected 4.3 million barrels of crude from stockpiles for the week ended Dec. 8.

Contracts for West Texas Intermediate in January continued to gain 0.88% to trade at
$70.08 on Thursday, while Brent crude advanced almost 1% to trade at $74.93.

On Wednesday, the WTI contract finished 1.3% up at $69.47, while Brent was up 1.02% to $74.26.

— Lim Hui Jie

Australia's unemployment rate rose to 3.9% in November, up from October's revised 3.8%.

It is the country's highest rate since May 2022, and more than the 3.8% expected by economists polled by Reuters.

The country's employment-to-population ratio returned to a record high of 64.6%, while the participation rate hit a new high of 67.2%, beating Reuters expectations of 66.9%. The participation rate refers to the number of people in the labor force as a percentage of the working age population.

— Lim Hui Jie

The Japanese yen strengthened against a weaker dollar Thursday after the U.S. Federal Reserve took a definitive stance on ending rate hikes and signaling cuts through next year.

The yen rose 0.2% to around 142 against the dollar, hitting its highest point in a week.

The Fed held its main lending rate at the 5.25%-5.5% range, while signaling that committee members penciled in at least three rate cuts in 2024, assuming quarter percentage point decreases.

The dollar sank nearly 1% against a basket of currencies following the decision.

Japan markets will now look toward the Bank of Japan's move on interest rates next week. Markets are hopeful that the country's central bank may not raise interest rates in that monetary policy meeting.

The Nikkei 225 rose 0.42% by the open.

— Shreyashi Sanyal

The Federal Reserve's plans for three rate cuts in 2024 helped buoy the Invesco Solar ETF (TAN) on Wednesday.

The fund jumped nearly 5.6%. The prospect of lower rates is good news for solar stocks. The industry is especially sensitive to high interest rates, which hurt the valuation of the companies and raise financing costs.

TAN constituent Enphase Energy gained 7.8%, while SolarEdge Technologies jumped 8.4%. Sunrun soared nearly 20%, notching its best day in more than a year.

Nevertheless, the stocks have had a rough year. Enphase and SolarEdge are off 59% and 71% in 2023, while Sunrun is down nearly 38%.

-Darla Mercado, Ethan Kraft

The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite are all headed toward their seventh straight week of gains.

Week to date, the Dow and S&P are up 2.3% and 2.2%, respectively. The Nasdaq is also up 2.3% for the week.

If the Dow manages to close the week in the green, that would mark its longest winning streak since Feb. 22, 2019, when it recorded nine straight weeks of gains. The S&P 500 would log its longest winning streak since Nov. 3, 2017 if it notches another positive week.

Meanwhile, the Nasdaq would be recording its longest winning streak since Jun. 16, 2023 if finishes higher for the week.

— Hakyung Kim

Check out the stocks making the biggest moves in post-market trading.

Adobe — Shares plunged by more than 5% after issuing light full-year earnings and revenue guidance for 2024. The company issued a revenue forecast between $21.3 billion to $21.5 billion in 2024. Analysts had estimated $21.73 billion, according to FactSet. 

Vir Biotechnology  — The immunology company shed 2.4% after announcing various cost-cutting measures, including a reduction of around 12% of its workforce. 

— Hakyung Kim

U.S. stock futures opened barely changed Wednesday night.

Dow Jones Industrial Average futures added just 2 points, or 0.01%.

Futures tied to the S&P 500 and Nasdaq Composite ticked up 0.02% and 0.06%, respectively.

— Hakyung Kim