Stocks struggled to regain ground after approaching a record high on speculation that the Federal Reserve will cut interest rates in 2024.

Equities barely moved with only a few days until the end of the year. While some traders cited an old Wall Street adage that "never short a dull market," concerns have emerged amid overbought levels and warnings about excessively dovish Fed bets.
The S&P 500 fluctuated near its all-time high, a feat recently accomplished by the Nasdaq 100 and the Dow Jones Industrial Average, sparking a debate about whether investors should be concerned or excited.

The S&P 500 was about 0.5% off its all-time high of 4,796.56. The megacap space outperformed as bond yields fell due to strong demand for a $58 billion sale of five-year notes. This came after a surprisingly strong two-year auction on Tuesday, which drew buyers looking to lock in higher yields before the Fed begins to ease policy.

According to Fed swaps pricing, traders have increased their bets on rate cuts as early as March. This viewpoint has gained traction since policymakers updated their forecasts this month, indicating that they expect rates to be reduced at a faster pace than previously projected.