[New York Close] 'Pivot Rally' Extended... 3 Major Indexes Rise

On the 18th (local time), the three major indices of the U.S. New York stock market extended their upward trend amid expectations of a pivot next year.

On that day at the New York Stock Exchange (NYSE), the S&P 500 index, centered on large-cap stocks, closed at 4,740.56, up 0.45%. The Dow Jones Industrial Average, focused on blue-chip stocks, ended at 37,306.02, unchanged from the previous session, while the Nasdaq index, centered on technology stocks, closed at 14,904.81, up 0.61%.

Since the beginning of this month, the Dow has risen 3.8%, and the Nasdaq has increased by 4.8%. The S&P 500 closed with gains for seven consecutive weeks through last week. Since 1964, the S&P 500 has closed with seven consecutive weekly gains 20 times, and among those, eight times it continued to rise for eight consecutive weeks.

Among individual stocks, big tech companies surged significantly. Meta rose nearly 3%, Alphabet (Google) jumped 2.50%, continuing the strong performance of the Magnificent Seven companies. Netflix closed up 3% after Morgan Stanley raised its target price by 16% to $550. U.S. steel company US Steel soared 26.09% on news of its acquisition by Nippon Steel.

However, Apple recorded a decline (-0.9%) due to expanded bans on iPhone usage in China and the suspension of Apple Watch sales in the U.S. U.S. hydrogen truck maker Nikola plunged 9.6% after news that founder Trevor Milton was sentenced to four years in prison on fraud charges for promoting unfinished technology to boost stock prices and deceive investors.

[Image source=Reuters Yonhap News]

The shift in monetary policy and expectations for interest rate cuts triggered by last week's Federal Open Market Committee (FOMC) meeting continue to boost investor sentiment.

Federal Reserve Bank presidents such as Loretta Mester and Austan Goolsbee explained the gap between the Fed and the market regarding interest rate cuts and tried to curb excessive optimism about rate cuts, but investors did not react. On that day, Loretta Mester, president of the Cleveland Fed, said, "The market is moving ahead of what the Fed thinks," and Austan Goolsbee, president of the Chicago Fed, warned that the Fed would not promise rate cuts anytime soon.

Chris Larkin, Managing Director of Trading at Morgan Stanley, said, "This week will be a week to see whether the stock market, which usually rises during the second half of December, will continue that trend," adding, "The recent short-term surge has been the strongest in recent years, so fatigue has also built up."

According to the Chicago Mercantile Exchange (CME) FedWatch, the probability that the Federal Reserve will cut rates in March next year, based on the federal funds (FF) rate futures market at the close, was 68.8%. The probability of a 0.25 percentage point cut was 63.4%.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) rose 0.28 points (2.28%) from the previous session to 12.56.

International oil prices rose due to geopolitical issues in the Red Sea. On the New York Mercantile Exchange (NYMEX), the price of West Texas Intermediate (WTI) crude oil for January delivery closed at $72.47 per barrel, up $1.04 (1.46%) from the previous day. With this increase, New York oil prices closed higher on five of the past seven trading days. However, so far this month, New York oil prices have fallen 4.59%.

On that day, following the conflict between Israel and the Palestinian militant group Hamas, Yemen's Houthi rebels launched an attack targeting Israeli vessels in the Red Sea. Major shipping companies decided to temporarily suspend transportation through the Red Sea, causing European natural gas futures prices to surge more than 7%.

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