Wall Street’s final session of the year has stocks set for their ninth straight week of gains — the longest winning run since 2004.

While signs of exhaustion have emerged over the last few days, the lack of any significant catalyst and anemic trading volume have left equities drifting near all-time highs. The great cross-asset surge has defied every major concern ranging from Federal Reserve uncertainty, recession forecasts and geopolitical risks. Many who came into 2023 dreading all that have ended up scrambling to chase the rally.

“The market shows signs of fatigue and undoubtedly needs to consolidate,” said Quincy Krosby, chief global strategist for LPL Financial. “But as long as participation remains broad, the bullish sentiment should carry the indexes as they navigate geopolitical and domestic scenarios, and an overarching positive consensus that 2024 will be a similarly strong year.”

The S&P 500 traded just steps away from its all-time high of 4,796.56. Fueled by the artificial-intelligence boom, stretched positioning and the “fear of missing out,” the US equity benchmark has risen about 25% in 2023, while the Nasdaq 100 headed for its best year since the dot-com era. Treasuries fell once again after positing solid gains in recent weeks. The recommended close for dollar-denominated cash bonds is 2 p.m. New York time. The greenback was poised for its worst year since the onset of the pandemic.

Key inflation data endorsing a growing narrative that central bankers will aggressively ease monetary policy in 2024 have fueled solid gains for both equities and bonds over the last two months. The rally has also been fueled by Fed Chair Jerome Powell’s dovish pivot at the December policy meeting.

“The notion that the major central banks have surely done enough to quell the inflationary surge of 2022-23 is powering the rally,” said Brian Barish, chief investment officer of Cambiar Investors LLC. “It’s not hard to imagine new things for the markets to be concerned by, such as elections, the sizable bond funding requirements of the US government, and/or any notion that inflation resurges anew. But for now, there’s not much news and not a lot of sellers.”

Equity markets have gone up so quickly that they’re highly vulnerable to a pullback if the US economy slips into even a mild recession, according to Royal Bank of Canada’s fund management arm.

The odds of such a downturn are still about 70%, says the chief economist of RBC Global Asset Management. Rate cuts are likely to happen in 2024, but the global economy hasn’t yet absorbed the full impact of almost two years of tightening, RBC economist Eric Lascelles said in an interview.

“What’s baked into the cake is a sizable jump in earnings, which is really only achievable in a soft-landing scenario,” Lascelles said.

This article was provided by Bloomberg News.