Year-end rally in US stocks faces twin tests

Strong gains: Traders working at the New York Stock Exchange. Some investors believe the rise in stocks has left markets more vulnerable to reversals if consumer prices do not keep cooling or the Fed is less dovish than expected. — Reuters

NEW YORK: The Federal Reserve’s (Fed) last monetary policy meeting of 2023 and a US inflation report in coming days should test a stock market rally that some view as stretched following weeks of gains.

Bets the Fed will begin cutting interest rates sooner than expected have fuelled a surge in US equities, which received a tailwind from a rapid decline in Treasury yields.