[New York Stock Market] Rally Continues for Second Day on Ongoing Speed Control Expectations... Nasdaq Jumps 8% Over the Week

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices on the U.S. New York Stock Exchange closed higher on Friday, the 11th (local time), continuing for the second day the expectations of a Federal Reserve (Fed) slowdown due to easing inflation. The Nasdaq Composite, which is mainly composed of interest rate-sensitive tech stocks, surged more than 8% over the week. News that China would ease its COVID-19 prevention regulations also supported investor sentiment.

On this day, the Nasdaq Composite closed at 11,323.33, up 209.18 points (1.88%) from the previous session. The S&P 500, centered on large-cap stocks, rose 36.56 points (0.92%) to close at 3,992.93. The Dow Jones Industrial Average showed a slight gain of 32.49 points (0.10%) to 33,747.86, reflecting a pause after the previous day's surge.

This marked two consecutive days of gains. Thanks to the two-day rally, the New York Stock Exchange recorded weekly gains of 8.1% for the Nasdaq, 5.9% for the S&P 500, and 4.1% for the Dow Jones.

By individual stocks, interest rate-sensitive tech stocks led the rally. Amazon rose 4.31% from the previous session. Tesla increased by 2.75%, and Apple by 1.93%. Semiconductor stocks such as Nvidia (+3.66%), AMD (+5.70%), and Intel (+2.25%) also showed strength. Due to China's easing of COVID-19 prevention regulations, Wynn Resorts jumped 8.31%, and Las Vegas Sands rose 5.53%. Chinese-related stocks including Alibaba (+1.43%), Nio (+11.80%), and Didi Global (+11.52%) also advanced.

Meanwhile, GSK fell more than 5% after UBS downgraded its investment rating to neutral and reports emerged that a certain ovarian cancer drug would not be used for specific patients. Coinbase rose nearly 13% as Piper Sandler reaffirmed its existing rating despite turmoil in the cryptocurrency market caused by the bankruptcy proceedings of FTX, a cryptocurrency exchange facing liquidity crisis.

Investors continued to monitor the Fed's expectations for a slowdown following the release of the October Consumer Price Index (CPI), along with news of China's easing of COVID-19 restrictions, the weakening dollar trend, and the impact on the cryptocurrency market from the start of FTX's bankruptcy protection proceedings.

The market widely expects the Fed to begin slowing its pace from December. According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds futures market reflects an over 85% probability of a 0.5 percentage point rate hike by the Fed in December, maintaining the previous day's level. The chance of a 0.75 percentage point hike stands at 14.6%. There are also ongoing views that the terminal rate will not exceed 5%. These expectations for a slowdown were a major factor supporting the stock market rally on this day. Additionally, news from China exerted upward pressure on the market. China has partially eased restrictions, including shortening the quarantine period for overseas arrivals by two days.

The dollar, a representative safe-haven asset, weakened. The Dollar Index, which measures the value of the dollar against six major currencies, fell more than 1.6% to the 106 level compared to the previous session. The British pound surged more than 1% against the dollar, marking its largest daily rally since 2017, and the euro also showed strength. The U.S. Treasury market was closed on this day for Veterans Day.

However, voices cautioning against the market rally also emerged. Bill Mulls of US Bank Wealth Management noted, "The previous day's strength was notable and meaningful but only for one day." He warned that even though major indices rallied this week, one should not forget that the declines since the beginning of the year have already been in double digits.

On this day, U.S. Treasury Secretary Janet Yellen welcomed the CPI data released the previous day but expressed caution about whether it marked a turning point, saying, "It is not clear." This aligns with the Fed officials' stance the day before, who left open the possibility of slowing but reaffirmed the tightening stance due to still-high inflation levels.

Uncertainty in the cryptocurrency market continued. FTX entered bankruptcy protection proceedings under Chapter 11 in the U.S., and CEO Sam Bankman-Fried announced his resignation, causing major cryptocurrencies to plunge. Bitcoin is currently trading around 16,800, down about 4.5% from the previous session. Ethereum is also trading over 3% lower at around 1,260.

Oil prices rose supported by China's easing of COVID-19 prevention regulations and a weaker dollar. At the New York Mercantile Exchange, December West Texas Intermediate (WTI) crude oil closed at $88.96 per barrel, up $2.49 (2.9%) from the previous session.

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