[New York Stock Market] Mixed Close Amid Earnings Watch... Netflix-Driven Tech Stock Rally

The three major indices of the U.S. New York stock market closed mixed and near flat on the 24th (local time), as investors monitored corporate earnings and other factors. A rally centered on technology stocks was confirmed, buoyed by the Netflix effect, which recorded the highest number of subscribers ever.

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 37,806.39, down 99.06 points (0.26%) from the previous session. Meanwhile, the large-cap-focused S&P 500 index rose 3.95 points (0.08%) to 4,868.55, marking its fourth consecutive session of record highs. The tech-heavy Nasdaq Composite Index increased by 55.97 points (0.36%) to 15,481.92.

Within the S&P 500, communication, technology, energy, and financial sectors rose, while other sectors declined. Netflix jumped nearly 11% after the previous day's market close, announcing that its total subscriber count reached a record high of 260.8 million. Alphabet (Google) rose 1.13%, and Nvidia increased 2.49%. Microsoft (MS) briefly surpassed a market capitalization of $3 trillion during the session. On the other hand, AT&T fell about 3% due to earnings below expectations.

[Image source=Getty Images Yonhap News]

Investors closely watched corporate earnings and guidance ahead of key economic data releases later this week, including the Personal Consumption Expenditures (PCE) price index and Gross Domestic Product (GDP). According to FactSet, more than 16% of S&P 500 companies have reported earnings so far, with 71% of those beating market expectations for net income.

Among big tech companies, Netflix kicked off the earnings season smoothly the day before. Mike Dixon, Head of Research at Horizon Investments, highlighted the earnings of technology stocks, especially the Magnificent Seven and AI-related stocks, saying, "The initial signals are quite positive." Mark Newman of Constrained Capital said, "We are in FOMC fear," adding, "People are excited about tech stocks."

However, Tesla's earnings released after the market close disappointed the market. Tesla's Q4 revenue last year was $25.167 billion, and earnings per share were $0.71, falling short of market expectations. Notably, the operating margin halved year-over-year to 8.2%. Tesla, which closed the regular session slightly down, is currently trading down more than 2% in after-hours trading.

This week, key economic indicators such as the December PCE price index and the preliminary Q4 GDP growth rate are also scheduled for release. Investors are expected to use these data to gauge the future direction of the Federal Reserve's monetary policy.

The preliminary S&P Global Manufacturing Purchasing Managers' Index (PMI) for January released on the day recorded 50.3. This is the highest level in 15 months and exceeds the expansion threshold of 50. The January Services PMI also reached 52.9, the highest in seven months.

The core PCE for December, to be released on the 26th, is expected to rise 0.2% month-over-month, slightly exceeding the previous month's increase. However, it is forecasted to show a slowdown with a 3% year-over-year increase. The preliminary U.S. Q4 GDP, released a day earlier, is estimated to have slowed to around 1.9%.

Currently, market expectations for an early rate cut have somewhat diminished compared to the beginning of the year. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the futures market currently prices in about a 41% chance that the Fed will keep rates unchanged in January and cut rates by at least 0.25 percentage points at the March Federal Open Market Committee (FOMC) meeting.

In the New York bond market, Treasury yields rose. The benchmark 10-year U.S. Treasury yield hovered around 4.17%, while the 2-year yield, sensitive to monetary policy, was around 4.38%. The dollar index, which measures the value of the U.S. dollar against six major currencies, fell more than 0.3% to 103.2.

International oil prices rose. On the New York Mercantile Exchange, March delivery West Texas Intermediate (WTI) crude oil closed at $75.09 per barrel, up 72 cents (0.97%) from the previous day.