New York Stock Market Closes After Digesting Hawkish Signals and Profit-Taking... Nasdaq Down 1.03%

Trading floor of the New York Stock Exchange, USA
[Photo by Yonhap News]

[Asia Economy Reporter Lee Ji-eun] Major indices on the U.S. New York Stock Exchange closed lower on the 9th (local time) despite strong corporate earnings, amid hawkish remarks from Federal Reserve officials and investors' profit-taking flows.

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average fell 249.13 points (0.73%) from the previous session to close at 33,699.88. The S&P 500, which focuses on large-cap stocks, dropped 36.36 points (0.85%) to 4,081.50, and the tech-heavy Nasdaq index closed down 120.94 points (1.02%) at 11,789.58. The market started the day higher but turned lower amid increasing profit-taking pressure during the session, widening losses before the close.

By sector, all 11 sectors of the S&P 500 recorded declines. According to FactSet, 66% of companies listed on the S&P 500 have reported their Q4 earnings so far, with 70% of those beating market expectations.

Despite solid corporate earnings, investor sentiment weakened due to ongoing uncertainties, leading investors to take profits, coupled with hawkish remarks from Fed officials this week. In particular, the possibility that the Fed may raise the benchmark interest rate to between 5.75% and 6.00% at the July Federal Open Market Committee (FOMC) meeting acted as a source of market anxiety.

Among companies, Walt Disney, which reported earnings after the previous day's close, showed strength early in the session but turned downward in the afternoon due to profit-taking selling. Earlier, Disney announced plans to cut 7,000 jobs despite earnings that beat market forecasts. On the day, after CEO Bob Iger stated he does not plan to remain in his position for more than two years, the stock rose to a five-month high during the session but then fell more than 1% amid profit-taking.

Alphabet's stock continued its decline, dropping more than 4% following a more than 7% fall the previous day, contributing to weakness in tech stocks. Investor concerns appear to have grown over intensifying competition in the artificial intelligence sector. Previously, Alphabet's stock fell 8% after errors were revealed in its AI-based conversational robot 'Bard.' Meta also saw its stock fall 3%, dragging down the tech-focused Nasdaq Composite Index.

Tesla's stock, which surpassed $200 the previous day, closed up 3% on the day, marking an eighth consecutive day of gains. Tesla's stock has risen approximately 103% from its January low.

Experts on the New York stock market analyzed that the market is digesting the expectation that the interest rate hike cycle will last longer than anticipated. Ed Moya, market analyst at OANDA, said, "Wall Street could not maintain an optimistic mood," adding, "Some traders are betting that the Fed will tighten much more than Wall Street expects."

In the New York bond market on the same day, major U.S. Treasury prices fell, pushing bond yields higher again. The 10-year U.S. Treasury yield rose 0.04 percentage points to close at 3.67%, reaching its highest level since April 4 last month. The 2-year Treasury yield increased 0.03 percentage points to 4.48%, and the 3-month Treasury yield closed 0.01 percentage points higher at 4.77% compared to the previous day.

Meanwhile, in the New York foreign exchange market on the same day, the value of the U.S. dollar declined. The Dollar Index, which measures the value of the U.S. dollar against six major currencies, fell 0.16% from the previous day to 103.108.

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