Dow and S&P 500 Rally Again as Inflation Rise Slows... Moderna Faces Test

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] News that the US Consumer Price Index (CPI) increase slowed in July drove the Dow Jones Industrial Average and S&P 500 indices to record highs. Moderna, a COVID-19 vaccine company, plunged amid growing controversy over its corporate valuation.

On the 11th (local time), the Dow Jones Industrial Average rose 220.30 points (0.62%) to 35,484.97, and the S&P 500 index increased 10.95 points (0.25%) to 4,447.70, continuing its record-breaking streak.

Meanwhile, the Nasdaq index closed down 22.95 points (0.16%) at 14,765.14.

Before the market opened, the July Consumer Price Index (CPI) was reported to be lower than expected, leading to a notable rise mainly in cyclical stocks.

Investing.com reported that optimism that inflation may have peaked stimulated investor sentiment. Investment bank Jefferies also assessed that "the large-scale inflation surge is over."

It is also analyzed that the passage of a $1 trillion infrastructure investment bill through the Senate influenced investor sentiment.

Although US Treasury yields fell due to strong demand in large-scale auctions, bank stocks continued to rise. Citigroup, Wells Fargo, and BOA all rose more than 1%.

Despite the spread of the Delta COVID-19 variant, airline stocks also rose about 1%.

The energy sector rebounded across the board as oil prices rose due to inventory declines, despite news that the White House pressured OPEC to increase production.

Moderna, which had surged sharply in recent days, plunged 15% following a negative report from Bank of America (BOA). BOA stated that Moderna's current corporate valuation cannot be justified and set a target price of $115. Moderna's closing price that day was $381.

Shares of BioNTech, the German company that developed the vaccine with Pfizer, also fell 13%. Pfizer's stock dropped 3.8%.

It is analyzed that news of European authorities confirming side effects of mRNA vaccines also influenced the stock declines.

Recently, as the Delta variant spread, Moderna and BioNTech stocks surged daily, surpassing the corporate valuations of major pharmaceutical companies.

Space travel company Virgin Galactic also fell 12% due to Morgan Stanley lowering its investment rating to underweight.

Canadian Goose, a padded clothing company, plunged 13% on disappointing earnings forecasts.

Cryptocurrency exchange Coinbase rose more than 3% on news that its Q2 earnings exceeded expectations.

Core tech stocks such as Apple, Microsoft, Amazon, Alphabet, and Facebook all declined.

This content was produced with the assistance of AI translation services.