Home Market ‘Stock-market correction is over’ after broad surge amid ‘epic’ market rallies

‘Stock-market correction is over’ after broad surge amid ‘epic’ market rallies

The S&P 500’s big jump amid last week’s “epic rallies” for stocks and bonds was driven in part by interest-rate-sensitive sectors that broadened the breadth of the index’s gains, putting it on course for a rally into year-end, according to Yardeni Research.

“All 11 sectors gained ground last week, many enjoying their best week in nearly a year,” said Yardeni analysts led by the firm’s president and chief investment strategist Ed Yardeni, in a note Monday. “We think the stock market’s correction is over and that the S&P 500 is back on track to end the year at 4,600.”

U.S. stocks finished higher Monday, with the S&P 500 index
edging up to about 4,366 after last week scoring its biggest weekly percentage gain since November 2022. After a group of seven so-called Big Tech stocks has fueled the S&P 500’s rally so far in 2023, investors are keeping an eye out for any signs of the market gauge’s breadth broadening as it rises. 

“The plunge in the bond yield boosted the valuation multiples of technology stocks as well as the more traditional interest-rate sensitive ones,” the Yardeni analysts said of last week’s rally. 

Real estate was the S&P 500’s best-performing sector last week, ripping 8.5% higher, while financials and consumer discretionary had the next biggest gains, the firm’s note shows. 

How S&P 500 sectors stacked up last week

S&P 500 sector


Real estate




Consumer discretionary


Information technology


Communication services










Consumer staples




Source: Yardeni Research note

Read: Home-builder ETFs surged, exceeding the Dow’s big gains

The U.S. stock market’s broad jump last week led the S&P 500
Dow Jones Industrial Average
and Nasdaq Composite
to a strong start to November, after the indexes slumped in the previous three consecutive months. 

“From August through October, investors were spooked by the jump in the 10-year U.S. Treasury bond yield from 3.96% on July 31 to 5.00% a week ago,” the Yardeni analysts said. 

U.S. stock prices broadly climbed last week as Treasury bond yields fell, with the rate on the 10-year Treasury note seeing its biggest weekly decline since March to finish Friday at 4.557% based on 3 p.m. Eastern Time levels, according to Dow Jones Market Data. 

Last week’s “epic” bond-market rally carried the 10-year Treasury note yield “down to a more comfortable distance from 5.00%,” the Yardeni analysts wrote. They said the move was “fueled by modestly bullish economic news that seems to have triggered a massive short-covering rally by the bears and a buying panic by the bulls.” 

The 10-year Treasury yield
rose Monday to 4.662%, according to Dow Jones Market Data. Bond yields and prices move in opposite directions.

Meanwhile, “the stock market seems to be following the classic seasonal year-end script of weakness in September and October setting the stage for a Santa Claus rally,” the Yardeni analysts said.

See: Dow scores best week since October 2022 as stocks rise after soft jobs report

The S&P 500 rallied 5.9% last week, with its real estate
and communication-services
sectors all beating the broader index over the same period.

Big Tech in 2023

Meanwhile, the S&P 500’s best-performing sectors so far in 2023 are communication services, tech and consumer discretionary, each with huge double-digit gains.

Big Tech stocks, which include seven giant companies that fall across all three of those sectors, have a heavy weighting in the S&P 500 index

Chip maker Nvidia Corp.

has by far the biggest gains among Big Tech stocks in 2023. Shares of the tech company, with a market valuation of more than $1 trillion, have skyrocketed 213% so far this year through Monday, according to FactSet data.

The next biggest 2023 stock gains in the Big Tech group are from Facebook parent Meta Platforms Inc.,

which has soared about 162%, followed by Tesla Inc.
whose shares have surged 78%, and then Amazon.com Inc.’s

jump of around 66%, according to FactSet. 

But real estate and financials, the S&P 500’s top two sectors in last week’s rally, remain down so far in 2023, with each sector falling Monday. By contrast, the S&P 500 has risen 13.7% this year.

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