[New York Stock Market] Mixed Trends Amid Geopolitical Tensions... Nasdaq Down 1.2%p

The New York stock market continued to show mixed trends despite banks' earnings surprises amid escalating geopolitical tensions.

On the 13th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,670.29, up 39.15 points (0.12%) from the previous session. The S&P 500, focused on large-cap stocks, fell 21.83 points (0.50%) to 4,327.78, while the tech-heavy Nasdaq dropped 166.99 points (1.23%) to close at 13,407.23.

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Following Hamas's attack on Israel, the risk of escalation into a full-scale war increased, drawing the stock market's attention. Investors closely monitored banks' quarterly earnings, movements in Treasury yields, remarks from Federal Reserve (Fed) officials, and the tension between Israel and Hamas. Although banks reported strong third-quarter earnings before the market opened, rising geopolitical tensions and a sharp increase in oil prices dampened investor sentiment.

JPMorgan Chase, the largest U.S. bank by assets, announced quarterly net income and operating revenue that significantly exceeded expectations. Wells Fargo also reported quarterly net income and operating revenue above forecasts. Shares of JPMorgan and Wells Fargo rose more than 1% and 3%, respectively. Citigroup posted quarterly operating revenue above estimates, but its stock fell 0.2%.

Fed officials also made dovish remarks. Patrick Harker, President of the Federal Reserve Bank of Philadelphia, suggested that the Fed's rate hikes have ended. Before his speech, Harker said, "We believe we have reached a point where we can hold rates where they are," adding, "Keeping rates steady allows monetary policy to do its job."

Harker holds voting rights on interest rate decisions at this year's Federal Open Market Committee (FOMC) meetings. His comments came amid other officials noting that rising long-term yields are tightening financial conditions, reducing the likelihood of further Fed rate hikes.

U.S. import prices rose less than expected. According to the U.S. Department of Labor, the import price index in September increased by 0.1% month-over-month, below the 0.5% rise forecasted by experts surveyed by The Wall Street Journal (WSJ). Import prices have risen for three consecutive months but at a slower pace than the 0.6% increase in the previous month.

The University of Michigan's consumer sentiment index for October fell to 63.0, marking the lowest level since May. This decline is interpreted as reflecting the burden of high inflation due to recent sharp oil price increases. The one-year expected inflation rate rose significantly to 3.8% from 3.2% the previous month. The five-year expected inflation rate also increased to 3.0% from 2.8% in the prior month.

Treasury yields fell as demand for safe-haven assets increased amid geopolitical uncertainty, pushing up bond prices. The 2-year Treasury yield dropped about 3 basis points to 5.04%, the 10-year yield fell about 7 basis points to 4.63%, and the 30-year yield declined about 8 basis points to 4.77%.

Concerns over a large-scale Israeli military offensive in Gaza City strengthened safe-haven demand.

Earlier, the Israeli military warned all civilians in Gaza City to evacuate southward. The possibility of intensified conflict between the two sides and news that the U.S. sanctioned companies violating the Russian oil price cap caused international oil prices to surge nearly 6%.

Within the S&P 500, stocks in the technology, consumer discretionary, communication services, industrials, and materials sectors declined, while energy, utilities, consumer staples, and health care sectors rose. Microsoft’s stock fell more than 1% after the company announced the completion of its acquisition of Activision Blizzard. Trading of Activision Blizzard shares has been halted due to the imminent deal.

New York market experts still see interest rates as the main driver of the market and expect stock prices to rebound once rates stabilize. Jeff Buchbinder, strategist at LPL Financial, told CNBC, "Considering the current interest rate levels, bonds remain strong competition for stocks, and we currently hold a neutral view on equities," adding, "If rates stabilize as expected, it will create a very favorable environment for stocks," and he judged the possibility of further rate hikes as low.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street’s "fear gauge," rose 2.63 points (15.76%) to 19.32 compared to the previous session.