[New York Stock Market] Tech Stocks Rally on Tightening End Outlook... Nasdaq Up 1.74%

Decline in Employment and Consumption Indicators Leads to Drop in Government Bond Yields
NVIDIA Hits Record High on AI Collaboration with Google

On the 29th (local time), the Nasdaq index rose by 1.74 percentage points in the U.S. New York stock market, driven by a rally in technology stocks including Nvidia. As indicators showed a slowdown in employment and consumption, expectations for the Federal Reserve (Fed) to end its tightening policy spread, leading all three major New York stock indices to close higher.

On that day, the Dow Jones Industrial Average closed at 34,852.67, up 292.69 points (0.85%) from the previous session. The S&P 500, which focuses on large-cap stocks, rose 64.32 points (1.45%) to 4,497.63, and the tech-heavy Nasdaq index ended the day at 13,943.76, up 238.63 points (1.74%).

Nvidia’s stock price surged 4.16% to $487.84, a record high, after announcing an AI-related partnership with Alphabet, Google's parent company. The two companies revealed plans to expand their collaboration to support AI scaling and large language models. Meta rose 2.66%, Tesla 7.69%, Apple 2.18%, and Microsoft 1.44% to close higher.

The stock market rose as expectations grew that the U.S. Federal Reserve (Fed) might end its tightening policy due to the slowdown in employment and consumption indicators released that day. The decline in U.S. Treasury yields was analyzed to have led to the tech stock rally.

According to the Job Openings and Labor Turnover Survey (JOLTS) released by the U.S. Department of Labor, private sector job openings in July were 8.8 million, down 338,000 (5.3%) from the previous month. This is the lowest figure since March 2021 (8.4 million) and significantly below market expectations (9.5 million). This indicates that the previously overheated U.S. labor market is cooling down.

The consumer sentiment index also declined. The Conference Board (CB) announced that the U.S. Consumer Confidence Index for August was 106.1, down 7.9 points from the revised July figure of 114.0 and well below the market expectation of 116.0. The rise in gasoline prices was cited as a cause.

Ronald Temple, chief market strategist at Lazard, a U.S. investment bank, said, "Today's JOLTS report is a response to the Fed's prayers," and evaluated that "it provided more evidence that the economy is cooling."

Jeffrey Roach, chief economist at LPL Financial, explained, "The Fed has repeatedly promised to rely on data, and considering today's report, it is highly likely that interest rates will be held steady in September," adding, "Investors are hoping for an employment report this Friday that will further solidify the foundation for the Fed to end the tightening cycle."

According to the FedWatch tool of the Chicago Mercantile Exchange (CME), as of the morning of that day, the federal funds futures market expected an 86.5% chance that the Fed would hold the benchmark interest rate at 5.25?5.50% in September. This is higher than the previous day (78.0%), one week ago (86.0%), and one month ago (80.0%).

Meanwhile, long-term Treasury yields are also falling. As of 4:26 p.m. that day, the 10-year U.S. Treasury yield was 4.113%, down 10.6 basis points (1 bp = 0.01 percentage points) from the previous trading day.

The market is focusing on employment and inflation data to be released this week. On the 31st, the Personal Consumption Expenditures (PCE) price index, closely watched by the Fed, will be announced, followed by the nonfarm payroll employment data on the 1st of next month.

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