[New York Stock Market] Rebound After One Day of Sharp Drop... Nasdaq Up 1.26%

The three major indices of the U.S. New York stock market rebounded on the 21st (local time) from the sharp decline the previous day due to profit-taking and closed higher across the board.

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 37,404.35, up 322.35 points (0.87%) from the previous session. The S&P 500, which focuses on large-cap stocks, rose 48.40 points (1.03%) to 4,746.75, and the tech-heavy Nasdaq index closed at 14,963.87, up 185.92 points (1.26%).

All 11 sectors in the S&P 500 advanced. Technology, communication, materials, healthcare, industrials, and consumer discretionary stocks posted gains exceeding 1%. Micron, which reported earnings exceeding Wall Street expectations after the previous day's close, jumped more than 8% from the previous session. Nvidia, Intel, and Qualcomm also rose more than 1%. Cruise company Carnival rose over 6% after its pre-market loss announcement was less than expected. Salesforce gained more than 2% after Morgan Stanley upgraded its investment rating.

[Image source=Reuters Yonhap News]

Investors focused on corporate earnings including Micron, economic indicators such as third-quarter gross domestic product (GDP), and movements in Treasury yields. Unlike the sharp decline due to profit-taking confirmed the previous day, attention shifted back amid expectations for a Federal Reserve (Fed) rate cut next year. The preliminary U.S. third-quarter growth rate nearing 5% also boosted investor sentiment by raising hopes for a soft landing.

According to the U.S. Department of Commerce, the finalized third-quarter GDP increased at an annualized rate of 4.9% quarter-on-quarter. This is a 0.3 percentage point downward revision from the preliminary estimate of 5.2% announced at the end of last month. It also fell short of the expert forecast of 5.1% compiled by The Wall Street Journal (WSJ). However, despite this downward revision, the third-quarter growth rate is the highest since the fourth quarter of 2021, which recorded 7.0% growth due to the base effect after the pandemic. It also shows clear growth compared to the previous quarter, the second quarter (2.1%). The annualized 4.9% matches the previously released flash estimate. U.S. GDP is announced three times?flash estimate, preliminary estimate, and finalized estimate?reflecting additional data each time.

On the same day, the Department of Labor reported weekly initial jobless claims rose by 2,000 to 205,000 compared to the previous week. This is below the expert forecast of 215,000. Although claims increased from the previous week, they remain at a low level. Continuing claims for unemployment benefits, which require at least two weeks of claims, decreased by 1,000 to 1,865,000 compared to the previous week.

Investors are now focusing on the inflation data to be released the next day. Wall Street estimates that the November Personal Consumption Expenditures (PCE) price index, to be released on the 22nd, will rise 0.1% month-over-month and 3.2% year-over-year, continuing a slight deceleration. If the slowdown exceeds market expectations, market hopes for rate cuts next year could gain further momentum. According to the CME FedWatch tool, federal funds futures currently reflect more than an 82% chance that the Fed will cut rates by at least 0.25 percentage points at the March meeting.

In the New York bond market, the benchmark 10-year U.S. Treasury yield briefly fell below 3.85% during the session but has since risen to around 3.89%. The 2-year yield, which is sensitive to monetary policy, slightly declined to around 4.35%.The dollar index, which measures the value of the U.S. dollar against the currencies of six major countries, is trading over 0.5% lower at 101.8. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street's fear gauge, is steady around 13.6.

Oil prices fell amid increased uncertainty following Angola's announcement of its withdrawal from the Organization of the Petroleum Exporting Countries (OPEC). On the New York Mercantile Exchange (NYMEX), the February delivery West Texas Intermediate (WTI) crude oil price closed at $73.89 per barrel, down 33 cents (0.44%) from the previous day.