[New York Stock Market] Nasdaq Rises 2.76% on Strong US Economic Indicators and Bargain Buying...

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices of the U.S. New York stock market closed higher on the 17th (local time) buoyed by optimistic economic indicators. Notably, bargain buying was observed mainly in technology, banking, and airline stocks.

At the New York Stock Exchange (NYSE) that day, the Dow Jones Industrial Average closed at 32,654.59, up 431.17 points (1.34%) from the previous session. The large-cap S&P 500 index rose 80.84 points (2.02%) to 4,088.85, and the tech-heavy Nasdaq index gained 321.73 points (2.76%) to close at 11,984.52. The small-cap Russell 2000 index also ended the day higher at 1,840.30, up 56.87 points (3.19%).

By individual stocks, semiconductor shares showed strength. AMD closed up 8.73% after Piper Sandler upgraded it to 'overweight.' Nvidia rose 5.29%, and Micron Technology jumped 5.69%. Qualcomm’s stock also increased by more than 4%. United Airlines (+7.88%) surged after raising its Q2 revenue forecast, lifting airline stocks sharply. Delta Air Lines and American Airlines rose 6.68% and 7.67%, respectively.

Additionally, Paramount Global’s shares soared more than 15% following news of Berkshire Hathaway’s stake acquisition. Home Depot closed up 1.68% supported by net income exceeding expectations. Walmart slid over 11% as its net income fell short of market forecasts.

Investors closely monitored the economic data released that day and remarks from Federal Reserve (Fed) Chair Jerome Powell.

The economic indicators showed resilience. The U.S. Commerce Department reported that April retail sales increased 8.2% year-over-year and 0.9% month-over-month. Despite inflation concerns, consumption?which accounts for two-thirds of the U.S. economy?continued to grow for the fourth consecutive month, signaling economic resilience. U.S. industrial production in April also rose 1.1% from the previous month, surpassing experts’ expectations of 0.5%.

Chairman Powell attended the 'Future of Everything' event hosted by the Wall Street Journal (WSJ) that afternoon and confirmed that the Fed will continue raising benchmark interest rates to curb inflation, which has surged to its highest level in over 40 years. His statement, "We will keep going (raising rates) until we see inflation clearly and decisively coming down," caused the market to briefly hesitate before rebounding.

Powell also indicated the possibility of raising rates above the broadly recognized neutral rate level, estimated at around 2.5%, saying, "If we have to go beyond the neutral rate, we will not hesitate to do so." He added, "If economic conditions are similar, we could discuss a 0.5 percentage point increase at the next meeting."

James Bullard, President of the Federal Reserve Bank of St. Louis, also predicted that the Fed would raise rates by 0.5 percentage points at the next Federal Open Market Committee (FOMC) meeting. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the federal funds (FF) futures market is pricing in more than an 80% chance of a 0.5 percentage point hike in June.

In the bond market, the yield on the U.S. 10-year Treasury note fell to the 2.88% range immediately after the retail sales release but then rebounded to 2.98%. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street’s 'fear gauge,' traded around 26, down about 5%.

New York market experts warned that concerns about a recession are growing and cautioned against overconfidence in rebounds and rallies during a bear market. Chris Senak, Chief Investment Strategist at Wolfe Research, said, "Despite the sharp rally, our bearish stance remains intact," adding, "We will take a more defensive position." Andrew Sheets, Morgan Stanley’s Chief Cross-Asset Strategist, also noted, "Whether good or bad, this is a pattern often seen in bear markets."

Oil prices fell after news that European Union (EU) member states failed to agree on a ban on Russian crude oil. At the New York Mercantile Exchange, June West Texas Intermediate (WTI) crude oil closed at $112.40 per barrel, down $1.80 (1.6%) from the previous session.

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