[New York Stock Market] Increased Volatility Amid Tightening Concerns, Late Rally... Nasdaq Up 0.74%

[Image source=AP Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices of the U.S. New York stock market showed volatility due to tightening concerns on the 14th (local time) but closed higher across the board. Rebound buying was confirmed following the sharp decline the previous day, and all three major indices turned positive just before the market closed.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 31,135.09, up 30.12 points (0.10%) from the previous session. The S&P 500, focused on large-cap stocks, rose 13.32 points (0.34%) to 3,946.01, and the tech-heavy Nasdaq index closed at 11,719.68, up 86.10 points (0.74%).

By sector, energy stocks rallied due to rising oil prices. ConocoPhillips closed up 4.79% from the previous session. ExxonMobil rose 2.45%, and Chevron increased by 2.42%. Major tech stocks that had slid the previous day also rebounded. Tesla jumped 3.62%, Apple rose 1.03%, and Netflix climbed 2.75%. However, Meta Platforms fell 1.08%, hitting a 52-week low.

Railroad stocks declined amid growing fears of a union strike. CSX dropped 1.05%, Union Pacific slid 3.69%, and Norfolk Southern also fell more than 2%.

Investors sought to gauge the Federal Reserve’s (Fed) tightening path through inflation indicators following the plunge seen the previous day. The Producer Price Index (PPI) for August, released on this day after the U.S. Consumer Price Index (CPI), slowed for the second consecutive month but failed to ease inflation concerns. The PPI fell 0.1% month-over-month, matching market expectations. Year-over-year, it rose 8.7%, but this was a slowdown compared to market expectations (8.9%) and the previous month (9.8%).

As inflation concerns persist, expectations for the Fed’s aggressive tightening are also gaining strength. According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds (FF) futures market currently prices in a 76% chance of a 0.75 percentage point rate hike in September. This would mark the third consecutive giant step (0.75 percentage point rate increase). The previously raised possibility of a 1 percentage point hike dropped from 31% the day before to 24% on this day.

Marki Hafele, CIO of UBS Global Wealth Management, said, "For a sustained rally, clear evidence that inflation is on a downward trajectory is necessary," adding, "With rising macroeconomic and policy uncertainties, market volatility is expected to continue over the coming months." Sam Stovall of CFRA said, "The hot inflation report rekindled investors’ fears of larger rate hikes," but also forecasted that "the June low will hold (not be broken)."

In the New York bond market, the 2-year Treasury yield, sensitive to monetary policy, briefly exceeded the 3.8% level in the morning. The 10-year yield rose to 3.47% intraday before retreating to around 3.41%. The inversion phenomenon, where short-term yields exceed long-term yields, continues. This is generally considered a signal of an economic recession. It indicates that concerns about rapid rate hikes eventually causing a U.S. economic downturn are still being reflected in the bond market.

On this day, the Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street’s ‘fear gauge,’ fell more than 4% from the previous session, hovering around the 26 level. The Dollar Index, which shows the value of the dollar against the currencies of six major countries, slightly declined near the 109 level.

Oil prices rose due to a decrease in gasoline inventories. On the New York Mercantile Exchange, October West Texas Intermediate (WTI) crude oil closed at $88.48 per barrel, up $1.17 (1.34%) from the previous session.

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