[New York Stock Market] Mixed Close Ahead of CPI Announcement... Nvidia Down for Second Day

On the 11th (local time), the U.S. New York stock market closed mixed ahead of the February Consumer Price Index (CPI) announcement.

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 38,769.66, up 46.97 points (0.12%) from the previous session.

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The S&P 500 index closed at 5,117.94, down 5.75 points (0.11%) from the previous session, and the Nasdaq index closed at 16,019.27, down 65.84 points (0.41%).

The three major indexes mostly declined due to weakness in technology stocks. The Nasdaq and S&P 500 indexes fell for the second consecutive trading day.

Nvidia's stock price also dropped about 2% on the day. On the 8th, it plunged about 6%, raising concerns that a correction might be imminent. Riding the AI boom, Super Micro Computer also fell more than 5%. AMD and ASML Holdings' stock prices declined more than 4% and 3%, respectively.

Meta's stock price also fell more than 4% on the day.

Investors are closely watching the February CPI to be announced tomorrow.

According to the Wall Street Journal (WSJ), experts expect the February CPI to rise 0.4% month-over-month, higher than the 0.3% increase in the previous month. Year-over-year, it is expected to rise 3.1%, the same as the previous month. The February core CPI is forecasted to increase 0.3% month-over-month, slowing from the 0.4% rise in the previous month. Year-over-year, it is expected to be 3.7%, lower than the previous month's 3.9%.

After the January CPI came out higher than expected, expectations for the Federal Reserve's (Fed) first rate cut were pushed back to June. Investors worry that if the February CPI is higher than expected, expectations for the Fed's first rate cut could weaken further.

The long-term inflation expectations released on the day rebounded again, increasing concerns about inflation. The 1-year expected inflation compiled by the New York Federal Reserve remained at 3%, unchanged from before, but the 3-year and 5-year expected inflation rose to 2.7% and 2.9%, respectively. These are increases of 0.3 percentage points and 0.4 percentage points from previous levels.

The Conference Board's February Employment Trends Index (ETI) turned down for the first time in three months. A decline in the index suggests a higher likelihood of reduced employment. The February ETI was 112.29, down from the previous month.

Bitcoin prices surpassed $72,000, increasing interest in related stocks. Bitcoin set another all-time high on the day. Ethereum surpassed $4,000 for the first time since December 2021.

Cryptocurrency exchange Coinbase Global's stock rose more than 3% intraday but closed down about 1% due to volatility. MicroStrategy's stock rose more than 4% on news of additional Bitcoin purchases.

Within the S&P 500, industrials, consumer discretionary, real estate, technology, and communication sectors declined. Materials, energy, consumer staples, and utilities sectors rose.

New York market experts expect the CPI to determine the market direction going forward.

Chris Larkin, Managing Director at E*TRADE, said, "This week's inflation data will decide whether the market rebounds or shows a continuous decline for the first time since October last year."

Louis Navellier, founder of Navellier & Associates, said, "This week's key news is the housing costs included in the CPI, especially Owner's Equivalent Rent (OER), and wholesale service prices in the Producer Price Index (PPI), which have been major catalysts for inflation."

According to the Chicago Mercantile Exchange (CME) FedWatch, the probability of a Fed rate cut in June at the close of the federal funds (FF) futures market was 68.9%, down from over 70% in the previous session.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) rose 0.48 points (3.26%) to 15.22 from the previous session.