[New York Stock Market] Mixed Close Amid Powell's Remarks and Weak GDP... Nasdaq Down 0.03%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] On the 29th (local time), one day before the end of the first half of 2022 trading, the U.S. New York stock market continued its rollercoaster session without finding a rebound point and eventually closed mixed within a narrow range.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 31,029.31, up 82.32 points (0.27%) from the previous session. The large-cap focused S&P 500 index closed down 2.72 points (0.07%) at 3,818.83, while the tech-heavy Nasdaq index ended the day up 3.65 points (0.03%) at 11,177.89.

The New York stock market will close the first half of the year on the 30th. Analysts suggest that if the market continues as is, it will record the worst first half performance since 1970. The economic media CNBC reported, "Concerns over recession and aggressive interest rate hikes dominated the first half of 2022, and fears of recession are increasing."

By individual stocks, some technology stocks showed signs of rebound. Amazon closed up 1.42% as JP Morgan reaffirmed its overweight rating and Redburn initiated a buy. Meta (+2.03%), Apple (+1.30%), and Microsoft (+1.47%) also rose. However, semiconductor stocks declined. Nvidia fell 2.75%, AMD dropped 3.45%, and Micron also slipped more than 3%. Tesla (-1.79%), which fell below the 700 level the previous day, continued its downward trend.

Cruise line Carnival plunged more than 14% after Morgan Stanley warned of potential demand reduction. Royal Caribbean also closed down 10.26%. Bed Bath & Beyond plummeted 23.58% due to disappointing earnings. General Mills rose 6.35% supported by better-than-expected earnings.

Investors closely watched the U.S. economic indicators released that day and remarks by Federal Reserve (Fed) Chair Jerome Powell.

The final figure for U.S. first-quarter Gross Domestic Product (GDP) growth rate was confirmed at an annualized -1.6%. This is a 0.1 percentage point downward revision from the preliminary figure (-1.5%) released last month. This marks the first time the U.S. quarterly growth rate has turned negative since the early stages of the COVID-19 outbreak in the first and second quarters of 2020. Generally, if GDP growth records two consecutive quarters of negative growth, it is considered a technical recession. The market's recession concerns have intensified as the Conference Board's Consumer Confidence Index hit its lowest level since February last year.

Chairman Powell, attending the European Central Bank (ECB) conference, stated that the Fed's rapid interest rate hikes could pose economic risks but emphasized that a bigger mistake would be failing to control soaring inflation. He stressed that price stability is the Fed's top priority and clearly conveyed a willingness to tolerate some economic slowdown in the process of curbing inflation. He added, "The U.S. economy is in a good position to withstand tight monetary policy," but also noted, "The Fed cannot guarantee a soft landing for the economy."

The Fed, which has positioned itself as an inflation fighter, raised rates by 0.75 percentage points this month and has signaled another increase of 0.5 or 0.75 percentage points next month. Earlier, Loretta Mester, President of the Cleveland Federal Reserve Bank, expressed support for a 0.75 percentage point rate hike at the July meeting.

Market experts predict that unless there are clear signals that inflation has peaked and is easing, it will be difficult for the market to find rebound momentum. Arun Sai of Pictet Asset Management said, "Until we get a definite signal that inflation has peaked, at best the market will just tread water." Christopher Harvey of Wells Fargo forecasted, "The market will not rebound until the Fed shifts from 0.5-0.75 percentage point hikes to a more routine 0.25 percentage point increase."

In the New York bond market, the yield on the 10-year U.S. Treasury fell to 3.10%.

Oil prices fell for the first time in four trading days ahead of the OPEC Plus meeting, a coalition of OPEC and non-OPEC oil-producing countries. On the New York Mercantile Exchange, August West Texas Intermediate (WTI) crude oil prices closed at $109.78 per barrel, down $1.98 (1.77%) from the previous session.