Overview

• U.S. stocks have rebounded from a months-long rut, with the S&P 500 and Nasdaq Composite both notching their best one-month gains since July 2022 in November.
• Analysts suggest that the Federal Reserve's aggressive interest rate hikes have done little damage to the U.S. economy, sparking a rally that has boosted the S&P 500 19.6% year-to-date.
• Treasury yields have been falling, with the yield on the 10-year Treasury note dropping from 5% in late October to 4.35%, the largest monthly drop since 2011.
• Analysts predict that the Fed is likely to hold rates steady at their December meeting, with the possibility of rate cuts beginning as early as 2024.
• Despite the market's hefty year-to-date rise, investment portfolios are likely to have plenty of underperforming stocks, with nearly 72% of the S&P 500's gain driven by a cluster of megacap stocks such as Apple, Tesla and Nvidia.