[New York Stock Market] Slightly Higher Ahead of Jackson Hole Meeting... Nasdaq Up 0.41%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices of the U.S. New York stock market closed higher on the 24th (local time) within a narrow range ahead of this week's Jackson Hole meeting. Investors are cautiously watching until the Federal Reserve's (Fed) tightening measures to lower inflation become clearer.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 32,969.23, up 59.64 points (0.18%) from the previous session. The large-cap S&P 500 index rose 12.04 points (0.29%) to 4,140.77, and the tech-heavy Nasdaq index gained 50.23 points (0.41%) to close at 12,431.53.

By sector, energy, airline, and cruise stocks showed strong performance. Leading cruise stock Carnival closed up 5.35% from the previous session. Norwegian Cruise Line Holdings rose 8.40%, and Royal Caribbean Group jumped 7.65%. United Airlines (+1.30%), American Airlines (+1.23%), and Delta Air Lines (+1.34%) all rose more than 1%. Rising oil prices also boosted ExxonMobil (+0.59%), Chevron (+0.74%), and Occidental Petroleum (+1.52%).

Tech stocks were mixed. Tesla (+0.22%), Meta Platforms (+1.33%), and Netflix (+2.25%) rose, while Microsoft (-0.24%) and Alphabet (-0.15%) showed weakness.

U.S. home training company Peloton surged 20.36% after news broke that it would sell its products through Amazon. Bed Bath & Beyond jumped 18% on news of securing a loan. Department store company Nordstrom slid nearly 20% after lowering its annual earnings outlook. SoFi closed up more than 4% following the Biden administration's announcement of a plan to forgive $10,000 in federal student loans.

Investors are awaiting the big event this week, the Jackson Hole meeting, closely monitoring the Fed's tightening path. On the 26th, when Chairman Powell is scheduled to speak, the Personal Consumption Expenditures (PCE) index will also be released. Goldman Sachs said, "The Jackson Hole meeting starting on the 25th could bring greater volatility to the stock and bond markets," adding, "Investors will look for hints on the Fed's next steps in its rate hike plans."

According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds (FF) rate futures market currently reflects a 60.5% probability that the Fed will raise rates by 0.75 percentage points in September. This would mark the third consecutive giant step (0.75 percentage point hike). This is up from 40% a week ago and 53% the day before. Meanwhile, the probability of a 0.5 percentage point hike has fallen below the 40% range.

This betting by investors suggests that even if the economy slows, the Fed will maintain its current tightening stance to reduce inflation. Minneapolis Federal Reserve Bank President Neel Kashkari expressed concern about inflation becoming entrenched in a speech the day before, stating, "We will need to be more aggressive for longer than I expected to bring down inflation." The market expects Chairman Powell to also express hawkish views regarding inflation concerns in his speech on the 26th.

However, economic indicators such as the U.S. Services Purchasing Managers' Index (PMI) released the day before are worsening, continuing to signal economic slowdown. The durable goods orders report for July released on this day also remained at a similar level to the previous month, falling far short of experts' expectations (1.0%).

Fahad Kamal, Chief Investment Officer (CIO) at Kleinwort Hambros, said, "There are quite significant signals that the economic environment is weakening," but added, "I think Chairman Powell will maintain a hawkish stance. He will continue to speak firmly on inflation." Lisa Erickson of U.S. Bank Wealth Management said, "The Fed will not ease its vigilance on inflation," adding, "Since the PCE data will be released just before the speech, we need to see how Chairman Powell incorporates that information into his outlook."

In the New York bond market on this day, the yield on the U.S. 10-year Treasury rose to around 3.11%. The 2-year yield, which is sensitive to monetary policy, rose to around 3.4%. The dollar remained steady. The euro rose 0.05% against the dollar to $0.9976.

After the market close, earnings reports from Nvidia and Salesforce will be released. Nvidia had previously warned of weak second-quarter results.

Oil prices rose. On the New York Mercantile Exchange, October West Texas Intermediate (WTI) crude oil closed at $94.89 per barrel, up $1.15 (1.23%) from the previous day. This is the highest closing price since July 29.

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