[New York Stock Market] Apple Weakens on 'Job Cuts', Nasdaq Down 0.81%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices of the U.S. New York stock market closed lower on the 18th (local time). The New York stock market, which started higher in the early session supported by strong earnings from major banks, turned into a downtrend in the afternoon. The market weakness was led by reports that Apple, a representative tech stock, will delay hiring next year in preparation for a recession.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 31,072.61, down 215.65 points (0.69%) from the previous session. The S&P 500, centered on large-cap stocks, closed at 3,830.85, down 32.31 points (0.84%), and the Nasdaq, focused on tech stocks, closed at 11,360.05, down 92.37 points (0.81%).

Tech stocks showed mixed results by individual stocks. Apple closed down 2.06% from the previous session following news of cuts and delays in next year’s hiring and spending. Alphabet, the parent company of Google, which recently underwent a stock split, also slipped more than 2%. Microsoft fell 0.96%. On the other hand, Meta (+1.54%), Netflix (+0.96%), and Nvidia (+2.15%) showed upward trends.

Bitcoin prices briefly recovered to $22,000, pushing Coinbase up more than 9%. MicroStrategy, which holds a large amount of Bitcoin, also rose 5.44%. Energy stocks such as Devon Energy (+3.62%) and Marathon Oil (+3.45%) showed strength amid rising oil prices. Goldman Sachs, which reported earnings exceeding market expectations, rose 2.51% from the previous session. Goldman Sachs’ Q2 earnings per share were $7.73, far surpassing the market forecast of $6.58.

Investors closely watched banks’ earnings announcements along with key economic indicators, recession concerns, and the Federal Reserve’s tightening outlook. The New York stock market started higher as Goldman Sachs, Bank of America (BoA), and others reported better-than-expected earnings, but the market sharply declined in the afternoon. Traders pointed to Apple as the reason for this shift in sentiment.

Peter Bookba, Chief Investment Officer of Blickly Advisory Group, said, “Apple’s rollover, with a market capitalization of $2.4 trillion, clearly impacts the composite indices.” Steve Sosnik, Chief Strategist at Interactive Brokers, said, “There is a big burden the market has to bear,” adding, “Tech stocks are market leaders.”

As corporate earnings continue to be unevenly released, there are concerns that market volatility will increase further. IBM’s earnings will be announced after the market closes. This week, earnings reports are expected from Johnson & Johnson, Netflix, Lockheed Martin, Tesla, United Airlines, Union Pacific, Verizon, and Twitter. Next week, major big tech companies will continue to release their earnings.

Scott Kronert of Citi said in an investor memo, “As the market oscillates between a soft landing and recession, market volatility will increase.” David Solomon, CEO of Goldman Sachs, also expressed concern during the earnings announcement, stating, “Inflation is deeply embedded in the economy.”

The market is also paying attention to the Fed’s tightening moves. The Wall Street Journal reported the previous day that the Fed is preparing a giant step to raise the benchmark interest rate by 0.75 percentage points at the July FOMC meeting. Jan Hatzius of Goldman Sachs also predicted the Fed would raise rates by 0.75 percentage points.

According to the Chicago Mercantile Exchange (CME) FedWatch on this day, the federal funds (FF) futures market reflects a 69.1% chance of a giant step in July. The bet on a 1.0 percentage point hike, which exceeded 80% on the day the Consumer Price Index (CPI) was released last week, has now dropped to around 30.9%.

In the New York bond market, the 10-year Treasury yield rose to around 2.98%. The inversion of short- and long-term yields, considered a precursor to recession, continues. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street’s “fear gauge,” rose more than 4% from the previous session, hovering around the 25 level.

Safe-haven gold prices rebounded slightly. On the New York Mercantile Exchange, August gold futures closed at $1,710.20 per ounce, up $6.60 (0.4%) from the previous session.

International oil prices rose. On the New York Mercantile Exchange, August West Texas Intermediate (WTI) crude oil futures closed at $102.60 per barrel, up $5.01 (5.1%) from the previous session.

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