[New York Stock Market] Big Tech Rally Led by Tesla's Over 10% Surge... Nasdaq Up 1.14%

The three major indices of the U.S. New York stock market all closed higher on Monday, the 11th (local time), ahead of the release of key indicators such as the Consumer Price Index (CPI) scheduled for this week. In particular, Tesla surged more than 10%, confirming a rally centered on big tech stocks. This week, in addition to inflation indicators, major data such as retail sales and the University of Michigan consumer sentiment survey are also scheduled to be released.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,663.72, up 87.13 points (0.25%) from the previous session. The large-cap S&P 500 index rose 29.97 points (0.67%) to 4,487.46, and the tech-heavy Nasdaq index closed at 13,917.89, up 156.37 points (1.14%).

In the S&P 500 index, nine sectors excluding energy and industrial stocks rose across the board. In particular, discretionary consumer goods and communication-related stocks showed notable gains. Electric vehicle company Tesla jumped more than 10% after Morgan Stanley upgraded its investment rating. Qualcomm rose nearly 4% after Apple signed a supply contract to use Qualcomm chips for another three years. Meta Platforms increased more than 3% following reports of developing a new artificial intelligence (AI) system. Apple, ahead of the launch of the new iPhone 15 the next day, closed slightly higher. Walt Disney and major cable company Charter Communications both saw their stocks rise by over 1% and 3%, respectively, after news of a settlement between the two companies. On the other hand, JM Smucker fell more than 7% on news of acquiring Hostess. Leading energy stocks such as Chevron (-2.06%) and ExxonMobil (-1.25%) also underperformed. Nvidia and AMD closed slightly lower as well.

[Image source=Reuters Yonhap News]

Investors are awaiting the release of key indicators this week to gauge the future direction of the Federal Reserve's (Fed) monetary policy. The previous day, the Wall Street Journal (WSJ) reported that confidence among Fed officials regarding the need for interest rate hikes is gradually waning, somewhat easing concerns about tightening.

On the 13th, the U.S. August CPI, which could provide important hints about the Fed's monetary policy direction, will be released. With recent oil price increases, the August CPI inflation rate is expected to slightly exceed the previous month's increase, hovering around 3.6%. The core CPI, which excludes the volatile energy and food sectors, is forecasted to slow to the low 4% range. On the 14th, the U.S. August Producer Price Index (PPI), representing wholesale prices, will be announced. Since wholesale price increases typically pass through to consumer prices, this data is closely watched. Retail sales for August will also be released on the same day. Wall Street expects retail sales, which had rebounded earlier, to slow this time. On the 15th, the University of Michigan consumer sentiment survey will be published.

According to the Chicago Mercantile Exchange (CME) FedWatch, as of the afternoon, the federal funds futures market still reflects over a 93% probability that the Fed will keep rates unchanged in September. The probability of a November rate hold stands at around 54%. However, if the inflation indicators such as the CPI released this week exceed market expectations, the possibility of additional rate hikes could gain renewed momentum. There are three remaining FOMC meetings this year: September, November, and December.

Chris Larkin of Morgan Stanley said, "This week is likely to be a story of 'good news is good, bad news is bad,'" adding, "The market's short-term rebound depends on this week's inflation data, especially the CPI." He noted, "If the data comes out hotter than expected, the Fed may become more hawkish, increasing concerns about rate hikes." Jamie Dimon, chairman of JP Morgan Chase and known as the emperor of Wall Street, warned at a financial conference held in New York that it would be a "big mistake" to think the U.S. economy will enjoy a boom for the next few years, citing ongoing risks such as central bank quantitative tightening and the Ukraine war.

In the New York bond market, Treasury yields rose slightly. The benchmark 10-year U.S. Treasury yield hovered around 4.29%, while the 2-year Treasury yield, sensitive to monetary policy, was around 4.98%. The U.S. dollar came under pressure. The Dollar Index, which measures the dollar's value against six major currencies, fell more than 0.5% from the previous session to around 104.5.

The market is also paying attention to the news of Apple's iPhone 15 launch. As the company with the largest market capitalization, Apple's stock movements are considered a factor that can influence the overall market sentiment. Last week, Apple's stock plunged following news of a ban on iPhones by Chinese authorities, worsening investor sentiment across tech stocks. Instacart and Klaviyo have officially started their initial public offering (IPO) journeys through roadshows. Instacart submitted a securities registration statement to the Securities and Exchange Commission (SEC) on this day, proposing a price range of $26 to $28 per share. Applying the desired price, Instacart's post-IPO valuation is expected to reach $8.6 billion to $9.3 billion (11.5 trillion to 12.4 trillion KRW). On the 13th, Arm, considered a major IPO this year, is expected to announce its offering price.

This week, the European Central Bank (ECB) is also scheduled to hold a monetary policy meeting. The current consensus is for rates to remain unchanged. Additionally, geopolitical risks have drawn attention as news emerged that North Korean Supreme Leader Kim Jong-un headed to Russia to meet Russian President Vladimir Putin.

On this day, oil prices fell slightly due to profit-taking pressure. At the New York Mercantile Exchange, October delivery West Texas Intermediate (WTI) crude oil closed at $87.29 per barrel, down 22 cents (0.25%) from the previous session.