[New York Stock Market] Mixed Close Ahead of FOMC and Big Tech Earnings... Nasdaq Down 0.43%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joeslgina] Major indices of the U.S. New York stock market closed mixed on Monday, the 25th (local time), ahead of the Federal Open Market Committee (FOMC) regular meeting and big tech earnings announcements scheduled for this week.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 90.75 points (0.28%) from the previous close to finish at 31,990.04. The S&P 500, which focuses on large-cap stocks, increased by 5.21 points (0.13%) to close at 3,966.84. Meanwhile, the tech-heavy Nasdaq index fell 51.45 points (0.43%) to 11,782.67.

By individual stocks, technology shares generally showed weakness ahead of this week’s earnings releases. Meta Platforms closed down 1.55% from the previous session. Amazon also slipped 1.05%. Alphabet, Google's parent company (-0.36%), Microsoft (-0.59%), and Apple (-0.74%) all showed weakness ahead of their earnings announcements.

Newmont’s stock price dropped more than 13% on the day after reporting worsened earnings due to a decline in gold futures prices. On the other hand, energy stocks showed strength as crude oil prices turned upward for the first time in four trading days. Diamondback Energy jumped 5.78%. Marathon Oil rose 6.57%, and Chevron closed up 2.98%.

Investors are closely watching the FOMC regular meeting scheduled for the 26th-27th, the second-quarter Gross Domestic Product (GDP) release on the 28th, and earnings reports from major tech companies. Amid ongoing concerns about a recession, these key events this week are expected to determine the market’s direction.

Sam Stovall, Chief Investment Strategist at CFRA Research, said, "Investors expect the second-quarter GDP to show negative growth, signaling an unofficial recession," adding, "The Federal Reserve (Fed) is expected to announce a 0.75 percentage point rate hike but take a more moderate stance on further increases."

According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds (FF) futures market currently prices in over a 75% chance of a 0.75 percentage point hike this month. In this case, the U.S. benchmark interest rate would be in the 2.25% to 2.50% range. Since this reaches the estimated neutral rate of 2.5%, there is speculation that Fed Chair Jerome Powell will refrain from making specific comments about tightening beyond September.

Corporate earnings, including those of tech companies, are also a focus of the market. On the 26th, earnings from Microsoft, Alphabet, McDonald's, and Coca-Cola will be released. On the 27th, Boeing, Meta, Ford, and Qualcomm will report, and on the 28th, Apple, Amazon, and Intel will disclose their results. Concerns are spreading in the market that, following Snap’s disappointing results, signs of a recession such as a sharp decline in digital advertising revenue centered on tech stocks will become evident. Google and Microsoft have recently begun reviewing their investment plans in response to the recession.

The economic indicators released on this day were weak. The Chicago Federal Reserve Bank reported the June National Activity Index (NAI) at -0.19, marking two consecutive months in negative territory. The Dallas Fed’s manufacturing activity index was -22.6, negative for the third consecutive month. The Atlanta Federal Reserve Bank’s GDPNow, which compiles real-time GDP estimates, projected on the 19th that the U.S. second-quarter GDP growth rate would be -1.6% annualized.

Ahead of the Fed’s rate hike, the 10-year Treasury yield in the New York bond market rose slightly to around 2.8%. The 2-year yield, sensitive to monetary policy, also reached the 3% range. The yield curve inversion, where short-term yields exceed long-term yields, continued. This is generally considered a precursor to a recession.

Crude oil prices rose as the dollar’s strength eased ahead of the FOMC. The September West Texas Intermediate (WTI) crude oil contract traded on the New York Mercantile Exchange closed at $96.70 per barrel, up $2.00 (2.11%) from the previous session. The dollar index, which measures the dollar’s value against the currencies of six major countries, fell to around 106 from the previous close.

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