[Good Morning Stock Market] New York Stocks Cheer CPI Below Expectations... "KOSPI Expected to Start Higher"

The New York stock market rose on a lower-than-expected Consumer Price Index (CPI). Expectations of the end of tightening were reflected. The Korean stock market is also expected to start higher influenced by the New York market.

[Image source=Yonhap News]

On the 14th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,827.70, up 489.83 points (1.43%) from the previous trading day. The S&P 500, focused on large-cap stocks, rose 84.15 points (1.91%) to 4,495.70, and the tech-heavy Nasdaq index gained 326.64 points (2.37%) to close at 14,094.38.

All 11 sectors of the S&P 500 advanced. Real estate-related stocks rose over 5%, while utilities and consumer discretionary sectors climbed more than 3%. Home Depot surged over 5% on better-than-expected earnings. Nvidia rose more than 2%. Tesla jumped over 6%. Boston Properties and SolarEdge Technologies each surged more than 10%.

The New York market rose on inflation data that was lower than expected, fueling hopes that the Federal Reserve’s rate hike cycle has ended and that rate cuts could begin next year.

Investors especially cheered the CPI report released that day. According to the U.S. Department of Labor, the October CPI rose 3.2% year-over-year, significantly slowing from the previous month’s increase of 3.7%. It also came in below the 3.3% forecast compiled by Dow Jones. The October CPI was flat month-over-month, falling short of both September’s 0.4% increase and the market expectation of 0.1%. This strengthened expectations that the Fed will not raise rates further, reinforcing hopes for a Goldilocks scenario and the end of tightening.

Han Ji-young, a researcher at Kiwoom Securities, said, "The market had been anxious about headline inflation rising due to oil prices and was cautious about inflation becoming entrenched. The October CPI seems to have alleviated some of these concerns and caution."

The domestic stock market is also expected to start higher thanks to the sharp rise in the U.S. market. Kim Seok-hwan, a researcher at Mirae Asset Securities, forecasted, "The domestic market will expand its gains due to risk asset preference, a decline in the exchange rate and government bond yields, and foreign inflows. The rise will be centered on large-cap stocks such as semiconductors and secondary batteries."