By Shubham Batra and Amruta Khandekar
(Reuters) -Wall Street's main indexes struggled for direction on Wednesday in the absence of any major catalysts to keep up the optimism around potential rate cuts by the Federal Reserve that briefly drove the S&P 500 close to an all-time high.
The benchmark index came within a whisker of breaching its record close touched in January 2022 earlier in the session, before erasing the gains.
Should the index close above the 4,796.56 level, it would confirm that it has been on a bull run. In October, it touched the bear market nadir, with the lowest closing.
Two weeks ago, after the Fed signaled the end of its rate hike cycle and opened the door to potential rate cuts in 2024, an eight-week rally in the main indexes went into overdrive.
Traders' bet that the Fed will deliver a rate cut in March rose to 84% from about 21% at the end of November, according to the CME Group's (NASDAQ:CME) FedWatch tool.
"I'm not quite sure on the timing (of the rate cuts), but what is clear is that they (the Fed) are on a path to cutting rates and that's supportive for valuations across the market," said David Waddell, CEO and chief investment strategist at Waddell and Associates.
The S&P 500 is on track to post its biggest quarterly gain in three years, and some analysts have pointed to a favorable set-up for equities heading into 2024.
However, volumes are likely to remain low during the week, with most participants away on year-end holidays and fewer catalysts - only a weekly jobless claims data expected on Thursday.
At 11:30 a.m. ET, the Dow Jones Industrial Average was up 46.41 points, or 0.12%, at 37,591.74, the S&P 500 was down 1.17 points, or 0.02%, at 4,773.58, and the Nasdaq Composite was down 7.08 points, or 0.05%, at 15,067.49.
Among the 11 major S&P 500 sector indexes, consumer discretionary led gains, as Tesla (NASDAQ:TSLA) rose 2.2% after a report that the electric vehicle maker was planning to roll out a revamped version of its Model Y.
Among other individual movers, shares of Bit Digital were up 16.4% 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 rose 19.0% after the company said the U.S. FDA has approved its drug delivery device for its infection-fighting treatment.
First Wave BioPharma shares more than doubled in value after the drug developer agreed to sell its inflammatory bowel disease drug to an undisclosed company.
Cytokinetics soared 64.3% 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.
Advancing issues outnumbered decliners by a 1.51-to-1 ratio on the NYSE and by a 1.05-to-1 ratio on the Nasdaq.
The S&P index recorded 40 new 52-week highs and no new lows, while the Nasdaq recorded 168 new highs and 47 new lows.