Stocks took a breather near all-time highs in Wall Street's final session of 2023. That was just a blip for bulls defying every doomsday scenario in a market that had its longest weekly advance since 2004.

Equities halted a five-day advance on the uneventful Friday before the holiday. After a more than $8 trillion surge in the S&P 500 this year, signs of exhaustion have emerged. Despite concerns about the Federal Reserve, recession fears, and geopolitical risks, the index gained for the ninth week in a row.

The S&P 500 fell slightly but remained very close to its January 2022 high. The gauge has risen 24% in 2023, fueled by the artificial-intelligence boom, stretched positioning, and "fear of missing out," while the Nasdaq 100 had its best year since 1999.

The US 10-year yield ended 2023 almost exactly where it began after a year of massive swings and numerous head fakes. It's an almost farcical ending to a year of trading that saw it fall to as low as 3.25% in the aftermath of the March banking crisis, only to surpass 5% a few months later.

On Friday, benchmark 10-year rates rose to nearly 3.9%. The dollar was little changed on the day, but it had its worst year since the pandemic began. Oil experienced its largest annual drop since 2020.

Over the last two months, key inflation data have fueled solid gains for both equities and bonds, supporting a growing narrative that central bankers will aggressively cut rates in 2024. Fed Chair Jerome Powell's dovish pivot at the December policy meeting has also fueled the rally.