[New York Stock Market] Nvidia Soars 14%... Nasdaq Closes Up 0.72%

[Asia Economy New York=Special Correspondent Joselgina] On the 23rd (local time), major indices of the U.S. New York stock market closed slightly higher, supported by a rally in Nvidia and others amid ongoing concerns about the Federal Reserve's (Fed) tightening. Investors are also awaiting the release of the Personal Consumption Expenditures (PCE) data the next day, aiming to clarify the Fed's tightening trajectory outlook.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,153.91, up 108.82 points (0.33%) from the previous session. The large-cap focused S&P 500 index rose 21.27 points (0.53%) to 4,012.32, and the tech-heavy Nasdaq index ended the day at 11,590.40, up 83.33 points (0.72%).

The S&P 500 saw a notable rally in interest rate-sensitive technology-related stocks. Energy-related stocks also performed well as international oil prices rebounded for the first time in a while.

By stock, Nvidia jumped more than 14% following strong earnings announced after the previous day's close, boosted by expectations for artificial intelligence (AI). Other semiconductor stocks such as AMD (+4.10%), Intel (+0.55%), and Qualcomm (+1.82%) also rose collectively. On the other hand, electric vehicle maker Lucid fell nearly 12% due to weak fourth-quarter sales. Bank of America (BoA) downgraded Lucid's investment rating on the same day citing demand concerns. Netflix dropped more than 3% after foreign media reported that it had lowered subscription fees in countries including the Middle East and Africa.

[Image source=Reuters Yonhap News]

The market showed volatility, starting higher, turning lower, and then rebounding again. Investors digested the minutes of the February Federal Open Market Committee (FOMC) meeting released the previous day and Nvidia's earnings, while closely watching key economic indicators.

Before the market opened, the U.S. economic growth rate for the fourth quarter of last year was revised downward from the preliminary estimate. The U.S. Department of Commerce announced that the GDP growth rate for Q4 last year was preliminarily estimated at an annualized 2.7%. This figure was revised down by 0.2 percentage points from the preliminary estimate of 2.9%. The U.S. growth rate is announced in three stages: preliminary, revised, and final.

The main reason for the lower growth rate compared to the preliminary estimate is analyzed to be the downward revision of personal consumption expenditures, which account for a significant portion of the U.S. real economy. Consumer spending for Q4 last year was revised down from the previous preliminary estimate of 2.1% growth to 1.4% growth, a 0.7 percentage point decrease.

However, recent data releases have consistently confirmed U.S. growth and a strong labor market, sustaining expectations for continued Fed tightening. The weekly initial jobless claims released on the same day also supported this, remaining below 200,000 for six consecutive weeks. According to the U.S. Department of Labor, new jobless claims for the week of February 12?18 totaled 192,000, down 3,000 from the previous week. This was below Wall Street's forecast of 200,000.

Jamie Dimon, CEO of JP Morgan Chase, known as the "Emperor of Wall Street," appeared on CNBC on the same day and criticized, "I respect Fed Chair Jerome Powell, but the fact is we have lost some control over inflation." He predicted that it would take considerable time for the Fed to achieve the 2% inflation target, which likely means interest rates will remain at higher levels. However, he gave a positive assessment of the recent U.S. economy, saying it is "doing quite well." CNBC reported that this evaluation contrasts with his earlier warnings that the U.S. economy could enter a recession within 6 to 9 months.

Brendan Murphy of Insight Investment said, "A recession is not necessarily a prerequisite for achieving the inflation target," adding, "We are currently in a period of low growth and easing inflation. The important question is how far inflation can fall in this environment." He said, "Below-trend growth needs to persist," explaining, "This is why the Fed talks about keeping interest rates at restrictive levels for an extended period."

Now, investors' attention is focused on the PCE price index scheduled for release the next day. The January PCE price index is estimated to have risen 4.3% year-over-year and 0.4% month-over-month. Since inflation has not been falling faster than market expectations in previously released data such as the January Consumer Price Index, if the PCE price index also exceeds expectations, concerns about Fed tightening are expected to intensify.

Corporate earnings announcements continue. After the market close on this day, Warner Bros. Discovery and others will release their earnings.

In the New York bond market, Treasury yields fell slightly. The 10-year U.S. Treasury yield dropped to around 3.88%. The 2-year yield, sensitive to monetary policy, also fell slightly to around 4.69%. The dollar, which had been rising, paused on this day. The Dollar Index, which shows the value of the dollar against six major currencies, stood at 104.5.

International oil prices rebounded for the first time in seven trading days due to previous excessive declines. At the New York Mercantile Exchange, April delivery West Texas Intermediate (WTI) crude oil closed at $75.39 per barrel, up $1.44 (1.95%) from the previous session.

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