[New York Stock Market] Mixed Close Amid Weakness in US Bank Stocks Due to 'Credit Downgrade'... Dow Down 0.51%

Major indices on the U.S. New York Stock Exchange closed mixed and near flat on the 22nd (local time), digesting earnings reports from major companies such as Macy's and news of credit rating downgrades for U.S. banks from the previous day. This week, key events remain, including earnings from Nvidia, the leader of the artificial intelligence (AI) rally, and the economic symposium "Jackson Hole Meeting," where Federal Reserve (Fed) Chair Jerome Powell will deliver a speech.

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,288.83, down 174.86 points (0.51%) from the previous session. The large-cap-focused S&P 500 index ended at 4,387.55, down 12.22 points (0.28%). In contrast, the tech-heavy Nasdaq index rose 8.29 points (0.06%) to 13,505.87.

Within the S&P 500, real estate, communication, utilities, and consumer discretionary sectors rose, while financials, energy, healthcare, and technology sectors declined. The weakness in bank stocks was confirmed after international credit rating agency S&P downgraded the credit ratings of five U.S. banks the previous day. Major large banks such as JP Morgan, Bank of America (BoA), Citi, and Wells Fargo saw declines in the 2% range. Nvidia, which surged the previous day ahead of its earnings report, fell 2.77%. Dick's Sporting Goods dropped more than 24% after reporting weak earnings and annual guidance due to increased retail theft. Macy's fell over 14% due to disappointing future outlooks. Conversely, Lowe's, a home remodeling products retailer, confirmed its existing guidance and rose nearly 4%. Novavax rose more than 13% on news of a new COVID variant. Toy company Hasbro jumped over 7% after BoA raised its target price.

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Investors are closely watching the final corporate earnings reports, the impact of U.S. bank credit rating downgrades, and recent sharp moves in Treasury yields while awaiting major events scheduled for this week. Earlier, S&P downgraded the credit ratings of five U.S. banks, including Associated Banc-Corp, Valley National Bancorp, and UMB Financial Corp, reaffirming caution toward the banking sector in the market. However, the impact on the New York stock market was not as pronounced as feared. The Dow and S&P 500 remained slightly down, while the Nasdaq, which had risen 1.6% amid the previous day's sharp rise in Treasury yields, maintained its upward trend on the day.

Corporate earnings released before the market open were mixed. Macy's beat expectations for Q2 earnings but saw sales decline compared to last year, raising concerns about future performance. Lowe's missed sales expectations but exceeded earnings per share forecasts. Investors' attention is focused on Nvidia's earnings report after the market close the following day. Most Wall Street analysts currently expect Nvidia's Q2 earnings, to be released after the close on the 23rd, to beat market expectations and foresee further gains in Nvidia's stock price.

This week holds major events attracting investor attention. From the 24th to the 26th, the economic symposium "Jackson Hole Meeting" will be held in Wyoming, USA. The event will be attended by Fed Chair Powell, European Central Bank (ECB) President Christine Lagarde, central bank governors from various countries, senior officials, and leading economists. Notably, Chair Powell is scheduled to deliver an economic outlook speech at 10:05 a.m. Eastern Time on the second day, the 25th. He is expected to reaffirm a data-dependent stance and leave open the possibility of further interest rate hikes if necessary.

On the day in the New York bond market, the 10-year U.S. Treasury yield hovered around 4.33%. The benchmark 10-year yield has been rising recently due to expectations of a soft landing, concerns over prolonged Fed tightening, and increased Treasury issuance, but showed some stabilization on the day. The 2-year Treasury yield, sensitive to monetary policy, surpassed the 5% level. The dollar index, which measures the value of the U.S. dollar against six major currencies, rose more than 0.3% to around 103.6.

Adam Turnquist, Chief Strategist at LPL Financial, told CNBC, "The 10-year yield is hovering near its October highs, so I think the market is shaking right now," adding, "If it starts moving higher, that will definitely be a warning signal for a deeper pullback in the stock market." Megan Hornman, Chief Investment Officer at Verdence Capital Advisors, also expressed concerns to CNBC, saying, "Generally, a sharp rise in Treasury yields exposes other vulnerabilities," and warned, "There is risk in tech stocks and high-PE growth stocks. Further declines in the stock market are likely."

Oil prices fell for the second consecutive trading day. On the New York Mercantile Exchange, September delivery West Texas Intermediate (WTI) crude oil closed at $80.35 per barrel, down 37 cents (0.46%) from the previous session.