[New York Stock Market] Slight Gains Ahead of CPI and Earnings... Dow Up 0.62%

The three major indices of the U.S. New York stock market closed higher on Monday, the 10th (local time), within a narrow range ahead of key inflation indicators and second-quarter corporate earnings announcements scheduled for this week.

On the New York Stock Exchange (NYSE) that day, the Dow Jones Industrial Average closed at 33,944.40, up 209.52 points (0.62%) from the previous session. The large-cap S&P 500 index rose 10.58 points (0.24%) to 4,409.53, and the tech-heavy Nasdaq index ended the day at 13,685.48, up 24.76 points (0.18%).

Within the S&P 500, industrial, healthcare, energy, financial, and real estate stocks rose, while communication, utilities, and technology stocks declined. Carvana surged more than 16% after announcing expectations of exponential growth due to consumer demand for electric vehicles. Icahn Enterprises jumped over 20% following a Wall Street Journal (WSJ) report that billionaire investor Carl Icahn revised personal loan terms and set up a repayment plan in response to a short-selling attack. Meanwhile, major tech stocks such as Microsoft, Apple, Tesla, Amazon, and Google Alphabet all recorded declines of 1-2%, while Meta Platforms rose 1.23% on news that its newly launched social media platform Threads surpassed 100 million users last week.

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Investors closely watched Federal Reserve (Fed) officials' remarks while awaiting this week's scheduled inflation indicators, including the Consumer Price Index (CPI) and Producer Price Index (PPI), as well as second-quarter corporate earnings reports. Particularly, with last week's ADP private employment report and Labor Department's employment report sending mixed signals about the labor market, attention is focused on the CPI to be released on the 12th. Wall Street expects the U.S. June CPI to rise 0.3% month-over-month and 3.1% year-over-year, indicating a slowing trend.

Tom Lee of Fundstrat appeared on CNBC's Squawk Box and diagnosed, "Last week's jobs report was so strong that selling pressure emerged, so I thought tactical opportunities were appearing." Russ Mold, investment director at AJ Bell, told MarketWatch, "Global stock markets fell sharply last week, damaging investor sentiment," adding, "The mood is to 'wait and see' until the next interest rate decision becomes clearer."

There were also hawkish remarks from Fed officials. Loretta Mester, President of the Cleveland Federal Reserve Bank, said, "The economy has shown a stronger foundation than expected earlier this year, and inflation remains stubbornly high," adding, "Slightly higher interest rates will help balance the risks between tightening too little and tightening too much." Mary Daly, President of the San Francisco Fed, mentioned, "There is a need to raise rates twice more this year." In contrast, Raphael Bostic, President of the Atlanta Fed, emphasized maintaining the current rate, stating, "There are signs the economy is slowing."

The Fed previously decided to hold rates steady at the June FOMC meeting but indicated through the dot plot the possibility of two additional hikes this year. Market expectations strongly favor a rate hike resuming at the July FOMC meeting scheduled for the 25th-26th. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the federal funds (FF) futures market currently prices in about a 93% chance of a 0.25 percentage point increase (a "baby step") in July. The Labor Department's employment report released on the 7th showed a slowdown in job gains compared to the previous month, but wage growth, which fuels inflation, remained high.

Major banks such as JPMorgan, Wells Fargo, and Citigroup, typically seen as the bellwethers of Wall Street's earnings season, will begin reporting results on the 14th. Ahead of them, PepsiCo and Delta Air Lines will announce earnings on the 13th. Current earnings forecasts are not optimistic. The WSJ reported yesterday, citing FactSet, that net profits of S&P 500-listed companies are expected to decline 7.2% year-over-year in the second quarter. This would mark three consecutive quarters of negative growth since Q4 last year. The New York stock market, which showed a surprise rally in the first half of the year, is now facing a test.

Bloomberg News cited a Market Live Pulse survey reporting that this earnings season could negatively impact the S&P 500 index. Fifty-five percent of respondents said the second-quarter earnings season would have adverse effects. Seventy percent believed the tech stock rally driven by the artificial intelligence (AI) boom was excessive. Stocks that benefited greatly from the AI craze, such as Nvidia and Microsoft, are expected to experience larger declines if their earnings fall short of investor expectations.

In the New York bond market, Treasury yields declined. The yield on the 10-year U.S. Treasury note stood at 4.02%, while the 2-year note yield was around 4.86%. The dollar index, which measures the value of the U.S. dollar against six major currencies, fell 0.3% from the previous session to 101.9.

Oil prices dropped due to profit-taking, Fed officials' hawkish remarks, and weak Chinese economic data. On the New York Mercantile Exchange, August delivery West Texas Intermediate (WTI) crude oil closed down 87 cents (1.18%) at $72.99 per barrel.

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