Dec 27 (Reuters) - U.S. stocks edged higher on Wednesday, with the S&P 500 inching closer to its all-time high on prospects of early interest rate cuts by the Federal Reserve.
The benchmark index (.SPX) is within a whisker of breaching its record close touched in January 2022 and on track to post its biggest quarterly gain in three years.
Eight of the eleven sub sectors of the index were trading in the green on Wednesday, with the consumer discretionary index (.SPLRCD) leading the gains.
Closing above the 4,796.56 level would confirm the S&P 500 has been in a bull market since touching the bear market nadir, the closing low reached in October 2022.
Volumes are, however, likely to remain low, with most participants away on year-end holidays and few catalysts, with only a weekly jobless claims data expected on Thursday.
"Traditionally, between Christmas and New Year's, there isn't much activity, but I do notice that a dominant emotion of optimism seems to be pervasive this week," said Peter Andersen, founder of Andersen Capital Management in Boston.
"I do think the Fed will not raise rates in 2024 and that the economy will continue to show a successful so-called soft landing. That should provide a solid foundation for a continued rally in 2024."
An eight-week rally in the main indexes went into overdrive two weeks ago after the Fed signaled the end of its rate hike cycle and opened the door to potential rate cuts in 2024.
Traders' bets that the Fed will deliver a rate cut in March currently stand at 84%, up from about 21% at the end of November, according to the CME Group's FedWatch tool.
At 9:49 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 27.61 points, or 0.07%, at 37,572.94, the S&P 500 (.SPX) was up 3.27 points, or 0.07%, at 4,778.02, and the Nasdaq Composite (.IXIC) was up 20.33 points, or 0.13%, at 15,094.90.
Gains in Tesla (TSLA.O) drove the Nasdaq (.IXIC) higher in early trade after reports that the electric vehicle maker was planning to roll out a revamped version of its Model Y.
Among individual movers, shares of Bit Digital (BTBT.O) were up 14.4% as the U.S.-based bitcoin miner plans to double its mining operating fleet to about 6.0 ether per second in 2024.
Coherus BioSciences (CHRS.O) rose 24.6% after the company said the U.S. FDA has approved its drug delivery device for its infection-fighting treatment.
First Wave BioPharma shares (FWBI.O) more than doubled in value after the drug developer agreed to sell its inflammatory bowel disease drug to an undisclosed company.
Cytokinetics (CYTK.O) soared 62.1% after its experimental heart disease drug met the main goal of a keenly awaited late-stage study, putting it on track to compete with a rival treatment from Bristol Myers Squibb (BMY.N).
Advancing issues outnumbered decliners by a 1.51-to-1 ratio on the NYSE and by a 1.44-to-1 ratio on the Nasdaq.
The S&P index recorded 29 new 52-week highs and no new lows, while the Nasdaq recorded 112 new highs and 24 new lows.
Reporting by Shubham Batra and Amruta Khandekar in Bengaluru; Editing by Shinjini Ganguli
