[New York Stock Market] Arm Soars 24.7% on IPO Debut...Nasdaq Up 0.81%

The three major indices of the U.S. New York stock market all closed higher on the 14th (local time), digesting economic indicators such as the successful initial public offering (IPO) of the UK semiconductor design company Arm and retail sales that exceeded expectations.

On the New York Stock Exchange (NYSE) that day, the Dow Jones Industrial Average, centered on blue-chip stocks, closed at 34,907.11, up 331.58 points (0.96%) from the previous session. The S&P 500, focused on large-cap stocks, ended at 4,505.10, up 37.66 points (0.84%), and the tech-heavy Nasdaq closed at 13,926.05, rising 112.47 points (0.81%).

All sectors in the S&P 500 showed gains. Notably, energy, real estate, utilities, materials, and telecommunications stocks saw significant increases. The UK semiconductor design company Arm confirmed strong investor interest by closing 24.69% above its IPO price on its Nasdaq debut day. Cruise company Carnival rose more than 4% following positive analyses from Wall Street. Norwegian Cruise Line also jumped over 5%. Following Brent crude oil, WTI also surpassed $90 per barrel at closing, leading major energy stocks such as ExxonMobil, Occidental Petroleum, and Chevron to rise collectively. Electric vehicle company Tesla increased by 1.75%. On the other hand, Delta Air Lines showed slight weakness after lowering profit estimates due to rising fuel costs. Starbucks also dipped slightly following the departure of founder Howard Schultz from the board.

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Investors digested economic indicators released that morning, including retail sales, PPI, and weekly unemployment claims, while keeping an eye on Arm’s Nasdaq debut and rising oil prices. The successful Nasdaq listing of Arm, considered a major IPO this year, sparked expectations for a revival in the IPO market, positively influencing overall market sentiment. Art Hogan, Chief Market Strategist at B. Riley Financial, said, "Arm’s successful IPO definitely helps confidence," adding, "It instills confidence that the capital market window (IPO) that was virtually closed for the past 18 months will reopen."

The economic indicators released that day showed strength. According to the U.S. Department of Commerce, August retail sales rose 0.6% month-over-month. This figure exceeds both the expert forecast of 0.1% compiled by The Wall Street Journal (WSJ) and the revised 0.5% increase in July. The recent rise in oil prices has caused gasoline prices to surge, leading to increased consumer spending.

The August Producer Price Index (PPI) rose 0.7% month-over-month and 1.6% year-over-year. These figures significantly exceed Wall Street forecasts of 0.4% month-over-month and 1.2% year-over-year. Following the Consumer Price Index (CPI) released the previous day, the PPI also clearly reflected the impact of recent oil price increases. However, since the inflation shock was not severe enough to alarm the market, the impact on the stock market was limited. Despite renewed inflation concerns, expectations for a rate hold at the upcoming September Federal Open Market Committee (FOMC) meeting remained unchanged.

Unemployment indicators turned upward for the first time in five weeks. According to the Department of Labor, new unemployment claims for the week of September 3?9 increased by 3,000 to 220,000 compared to the previous week. Continued claims, which represent those applying for unemployment benefits for at least two weeks, rose by 4,000 to 1.69 million. Although recent data shows signs of labor market slowing, it is still considered historically strong.

Mike Loewengart of Morgan Stanley said, "As with last week, economic indicators confirm the resilience of the U.S. economy," adding, "The problem is that the unexpectedly high PPI suggests persistent inflation." He noted that while the Federal Reserve (Fed) is still likely to hold rates next week, additional rate hikes could occur if the economy continues to show strength.

According to the CME FedWatch tool, the federal funds futures market in the afternoon reflected over a 97% probability that the Fed will hold rates in September. Investors expect the Fed to maintain the current rate of 5.25?5.5% at this meeting while delivering a hawkish message through the dot plot and press conference. Attention is also focused on what Fed Chair Jerome Powell will say regarding recent oil price increases. Earlier, the European Central Bank (ECB) raised its policy rate by 0.25 percentage points, marking its tenth consecutive hike. The ECB revised its inflation forecast upward to 5.6% for this year and 3.2% for next year, reflecting the recent surge in energy prices.

In the New York bond market that day, the benchmark 10-year Treasury yield hovered around 4.28%, while the 2-year yield, sensitive to monetary policy, stood at 5.01%. The dollar index, which measures the value of the U.S. dollar against six major currencies, rose more than 0.5% to around 105.3.

International oil prices rose. Following Brent crude, West Texas Intermediate (WTI), the benchmark for U.S. crude prices, also surpassed $90 per barrel that day. October WTI futures on the New York Mercantile Exchange closed at $90.16 per barrel, up $1.64 (1.85%) from the previous session. This is the highest level since November 7 of last year. It is also the first time since last November that WTI prices have closed above $90 per barrel. The recent heightened concerns over crude supply shortages are seen as a factor putting upward pressure on oil prices.