[New York Stock Market] Nvidia Soars 7%... Semiconductor Stocks Rise Together on Earnings Expectations

The three major indices of the U.S. New York stock market closed higher on Monday, the 14th (local time). The tech-heavy Nasdaq index rose more than 1%, supported by strength in semiconductor stocks including Nvidia.

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 35,307.63, up 26.23 points (0.07%) from the previous session. The large-cap S&P 500 index rose 25.67 points (0.58%) to 4,489.72, and the Nasdaq index closed at 13,788.33, up 143.48 points (1.05%).

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Within the S&P 500, stocks related to technology, telecommunications, healthcare, and discretionary consumer goods rose, while utilities, real estate, energy, and essential consumer goods stocks declined. Notably, the rally in technology and telecommunications stocks stood out. Nvidia, which had fallen more than 8% over the past week, rose 7.09% from the previous session after Morgan Stanley issued a positive assessment ahead of its earnings announcement. AMD rose 4%, and Intel jumped more than 2%. The VanEck Semiconductor ETF, composed of semiconductor-related stocks, rose more than 3%. On the other hand, Tesla fell more than 1% following news of a price cut for its Model Y electric vehicle. AMC Entertainment dropped nearly 36% after a Delaware court approved a plan last week to convert preferred shares into common stock.

Investors are awaiting this week’s scheduled corporate earnings announcements, key economic indicators, and the release of the July Federal Open Market Committee (FOMC) minutes.

This week marks the final phase of the earnings season, with numerous retail companies set to report results that will shed light on U.S. consumer spending power. Following Home Depot’s report on the 15th, retail giant Target, TJX?the parent company of discount stores TJ Maxx and HomeGoods?will report on the 16th, followed by Walmart and Ross Stores on the 17th. Home Depot, which posted weak first-quarter results, has already lowered its full-year earnings guidance. In contrast, Walmart raised its sales outlook earlier this year, buoyed by strong grocery and e-commerce performance in May. On this day, Evercore ISI stated that Walmart’s second-quarter earnings could significantly exceed Wall Street expectations.

The retail sales data for July will be released the following day. Wall Street expects July retail sales to increase by 0.4% month-over-month, continuing the rebound trend. If retail figures surpass expectations, optimism that a recession can be avoided is likely to strengthen. However, robust consumer data could also support the Federal Reserve’s need to maintain high interest rates for an extended period.

The Fed, which raised the benchmark interest rate to 5.25-5.5%, is scheduled to release the July FOMC minutes on the 16th. Investors will likely look to these minutes for clues on the direction of interest rates after September and any changes in economic outlook.

The market still largely expects rates to remain unchanged in September. According to the CME FedWatch tool, as of this day, the federal funds futures market prices in an over 88% probability that the Fed will hold rates steady in September. The June dot plot indicated the possibility of one more rate hike this year, but the market is betting that current rates will persist throughout the year. Goldman Sachs also predicted that the Fed will pause in September and signal the end of tightening in November, with rate cuts expected in the second quarter of next year.

The July survey released by the New York Federal Reserve Bank showed that consumers’ one-year inflation expectations stood at 3.5%, down from 3.8% the previous month. The three-year and five-year inflation expectations also declined slightly to 3% and 2.9%, respectively.

Additionally, this week includes interest rate decisions from the Reserve Bank of New Zealand and the Norges Bank. On the 18th, the Korea-U.S.-Japan summit will be held at Camp David in the United States.

In the New York bond market on the day, the benchmark 10-year U.S. Treasury yield rose to the 4.19% range, and the 2-year yield climbed to the 4.96% range. The dollar index, which measures the value of the U.S. dollar against six major currencies, rose about 0.3% from the previous session to around 103.1.

International oil prices fell amid growing concerns over demand slowdown due to weak economic data from China. On the New York Mercantile Exchange, September delivery West Texas Intermediate (WTI) crude oil prices closed at $82.51 per barrel, down 68 cents (0.82%) from the previous session.

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