[New York Stock Market] Mixed Close Amid High Volatility... S&P 500 Records Worst Day Since 2020

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] The major indices of the U.S. New York stock market closed mixed on the last trading day of the week, the 17th (local time), amid uncertainties over an economic recession.

The Dow Jones Industrial Average, which had fallen below the 30,000 mark the previous day, continued a slight decline. The S&P 500, centered on large-cap stocks, and the Nasdaq, focused on tech stocks, rebounded. However, on a weekly basis, all three major indices retreated together, with the S&P 500 recording its worst week since 2020.

On this day at the New York Stock Exchange (NYSE), the Dow closed at 29,888.78, down 38.29 points (0.13%) from the previous session. The S&P 500 ended at 3,674.84, up 8.07 points (0.22%), and the Nasdaq closed at 10,798.35, rising 152.25 points (1.43%).

The market digested the impact of the central bank's aggressive tightening and the resulting recession concerns. In particular, strong volatility was observed on 'Quadruple Witching Day,' when stock index futures and options, as well as individual stock futures and options, expire simultaneously.

By stock, recently plummeting tech stocks rallied on this day. Tesla closed up 1.72% from the previous session. Amazon (+2.47%), Netflix (+1.25%), Apple (+1.15%), Nvidia (+1.79%), and Microsoft (+1.09%) also saw their stock prices rise. Travel stocks such as Airbnb surged 6.68%. Carnival jumped 9.71%, and Norwegian Cruise Line rose 10.12%.

American Express rose nearly 5%, leading the Dow higher. Boeing (+2.58%) and Salesforce (+2.13%) also closed up more than 2% each.

However, energy stocks fell sharply as international oil prices plunged. Devon Energy closed down 8.30% from the previous session. ExxonMobil dropped 5.77%. Schlumberger and Chevron each slid nearly 5%.

Investors closely watched recession concerns along with remarks from Federal Reserve Chair Jerome Powell and movements in international oil prices.

On this day, Chair Powell emphasized his commitment to price stability again at the Fed-hosted 'Conference on the International Role of the U.S. Dollar' held in Washington, D.C., stating, "My colleagues and I are very focused on bringing inflation back to our 2% target." Earlier, he had already signaled a rate hike of 0.5 or 0.75 percentage points at the upcoming July FOMC meeting.

However, internal analysis suggested that the interest rates indicated by the Fed's dot plot might not be sufficient to properly tackle inflation. The Wall Street Journal (WSJ) reported that while the dot plot shows U.S. interest rates at 3.25-3.50% by the end of this year, applying recent economic data to the Fed's internal formula indicates that rates need to reach at least 4% to control inflation.

The New York Federal Reserve Bank forecasted that the U.S. economy could enter a contraction phase faster than initially expected. According to this projection, the U.S. growth rate for the fourth quarter of this year is estimated at -0.6%. Analysis also suggested that the likelihood of a soft landing for the U.S. economy, as claimed by the Fed, is only 10%.

Additionally, according to a survey conducted by the Conference Board of 750 global CEOs, over 60% of respondents expected a recession in the regions where their businesses operate within the next 12 to 18 months. This is a sharp increase from 22% at the end of last year.

On this day in the New York bond market, the 10-year Treasury yield slightly declined to the 3.2% range. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street's 'fear gauge,' moved around 31, down 5% from the previous session.

Chris Harvey of Wells Fargo said, "For many investors, a short-term recession has become an unavoidable conclusion," adding, "The question now is the duration and the severity of its impact on returns." The S&P 500 fell 5.8% this week. The Dow and Nasdaq dropped 4.8% each.

Amid rising recession concerns, international oil prices plunged sharply. On the New York Mercantile Exchange (NYMEX), July delivery West Texas Intermediate (WTI) crude oil closed at $109.56 per barrel, down 6.82% ($8.03) from the previous trading day. This is the lowest closing price since May 12.

The daily drop was the largest since March 31. Oil prices fell 9.21% ($11.11) this week, ending a seven-week winning streak. This marks the first weekly decline in eight weeks. On the same day, August Brent crude on the London ICE Futures Exchange was trading over 6% lower in the $112 per barrel range. Fahad Razakzada, an analyst at City Index, said, "Concerns about demand are rising as expectations grow that the global economy will slow down in the coming months."

International gold prices fell due to the strength of the U.S. dollar. On this day at the New York Commodity Exchange, August delivery gold closed at $1,840.60 per ounce, down 0.5% ($9.30). Gold prices, which had surged the previous day amid heightened safe-haven demand due to recession fears, turned downward.

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