[New York Stock Market] Semiconductor and Materials Stocks Lead... Nasdaq Up 1.93% on US Employment Improvement

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices on the U.S. New York stock market closed higher on the 24th (local time), buoyed by strength in semiconductor and materials stocks. Despite ongoing pressures increasing market uncertainty such as inflation concerns, the Ukraine invasion, and additional Western sanctions, confidence in economic recovery was stronger, as evidenced by the weekly U.S. unemployment insurance claims dropping to the lowest level since 1969.

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 349.44 points (1.02%) from the previous close to finish at 34,707.94. The large-cap S&P 500 index gained 63.92 points (1.43%) to close at 4,520.16, while the tech-heavy Nasdaq index ended up 269.24 points (1.93%) at 14,191.84. The small-cap Russell 2000 index also closed higher by 23.24 points (1.13%) at 2,075.44.

By sector, stocks benefiting from economic recovery such as semiconductors and materials led the gains. Nvidia closed up 9.82% from the previous session. Intel rose 6.94%, and AMD jumped 5.80%. Tesla increased 1.48%, reclaiming the '1000Sla' milestone. Materials stocks like Newco (4.34%) and Freeport-McMoRan (3.29%) also ended the day higher.

Uber surged more than 4% after announcing a partnership with New York City taxis, allowing NYC taxis to accept customer reservations through the Uber app. Spotify’s stock initially declined after Google announced it would allow Spotify’s own payment system but ended the day with a slight gain. Electric truck maker Nikola rose over 5% following its announcement to begin commercial electric truck production.

Investors closely monitored the Ukraine situation, related meetings of Western leaders including the U.S. in Europe, movements in international oil prices, inflation concerns, and the pace of Federal Reserve (Fed) tightening.

International oil prices remained in the $110 per barrel range, intensifying inflation worries. The Wall Street Journal (WSJ) noted, "Rising oil prices are pushing up costs not only for energy but also for plastics and fertilizers," highlighting the broadening inflationary pressures. Fed officials, including Chairman Jerome Powell, have repeatedly hinted at the possibility of a 'big step' 0.5 percentage point rate hike, signaling a potential acceleration in tightening. On this day, the yield on the U.S. 10-year Treasury note rose to 2.368%.

Uncertainty surrounding the Ukraine crisis persists. President Biden, visiting Europe for the first time since the outbreak of the Ukraine war, attended consecutive meetings in Brussels with NATO, the Group of Seven (G7), and the European Union (EU) leaders to discuss responses to Russia. In a subsequent press conference, Biden answered "yes" when asked if Russia should be expelled from the G20. He also strongly warned that the U.S. would respond if Russia used chemical weapons.

The U.S. Treasury Department imposed additional sanctions on Russia, targeting the Russian State Duma (the lower house of the Federal Assembly) and 328 of its members. Besides Duma members, 48 Russian defense-related companies including missile and helicopter manufacturers, as well as dozens of Russian elites, were added to the sanctions list. The UK also expanded sanctions on Russian banks, key businesses, and individuals on the same day.

Richard Saperstein, Chief Investment Officer at Treasury Partners, assessed, "The market is fundamentally more risky and uncertain than before Russia’s invasion of Ukraine." Daniel Morris, Senior Market Strategist at BNP Paribas, said, "Until mid-February, rate hikes were the main concern, but since then, the war has dominated. The current challenge is where to invest in this environment."

Employment data released on the day showed positive signs. According to the Department of Labor, weekly unemployment insurance claims for the week ending the 19th fell by 28,000 to 187,000, the lowest level since September 1969. This figure was well below expert forecasts. The current account deficit for the fourth quarter, also released the same day, decreased by 0.9% quarter-on-quarter to $217.88 billion, falling short of market expectations.

International oil prices declined amid attention to the potential restoration of the Iran nuclear deal and possible Western sanctions on Russia. On the New York Mercantile Exchange, May West Texas Intermediate (WTI) crude futures closed down $2.59 (2.3%) at $112.34 per barrel. Edward Moya, Senior Market Analyst at OANDA, noted in a report that oil prices fell on expectations that NATO would not immediately impose energy sanctions on Russia.

Gold, a representative safe-haven asset, rose. Gold futures increased 1.24% from the previous close to $1,961.50 per ounce.