New York Stock Market Rises on Nvidia's 4% Surge... Awaiting March FOMC

NVIDIA Rises Ahead of GTC
Investors Focus on FOMC on 19-20
Key Issues: Economic Outlook and Dot Plot Revisions

The three major indices of the U.S. New York stock market are rising in early trading on the 18th (local time). As investors await the Federal Open Market Committee (FOMC) monetary policy meeting scheduled for the 19th-20th, technology stocks, including Nvidia, which is holding an artificial intelligence (AI) developer conference on this day, are pushing the indices higher. This week also features an earnings announcement from Micron.

As of 9:41 a.m. at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average is up 0.29% from the previous close, standing at 38,827.46. The large-cap-focused S&P 500 index has risen 0.98% to 5,167.43, and the tech-heavy Nasdaq index is trading 1.59% higher at 16,227.81.

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By individual stocks, Nvidia is up 4.33% ahead of its developer event, 'GTC (Graphics Technology Conference) 2024,' which runs from today through the 21st. Nvidia is expected to showcase its latest AI technologies at this event. Apple is up 2.23% on news that it is discussing integrating Google's AI chatbot Gemini into the iPhone. Alphabet, Google's parent company, is also up 6.99%. Super Micro Computer is rising 6.05% on its first day included in the S&P 500 index.

Investor attention is focused on the two-day FOMC meeting starting on the 19th. At this second meeting of the year, the U.S. Federal Reserve (Fed) is widely expected to keep the benchmark interest rate at the current 5.25-5.5% range. The key question is whether the Fed will revise the dot plot, which shows economic and interest rate projections. Previously, at the December FOMC, the Fed projected the median federal funds rate for this year at 4.5-4.75%, anticipating three 0.25 percentage point rate cuts over the year. It also forecast an additional 1 percentage point cut in 2025. However, with inflation proving stronger than expected since the start of the year, some speculate the Fed may reduce the number of rate cuts this year from three to two. Both the Consumer Price Index (CPI) and Producer Price Index (PPI) exceeded market expectations in February, following January's results.

The message Fed Chair Jerome Powell delivers at the press conference immediately after the FOMC meeting is also expected to provide hints about the future path of interest rates. Particular attention is on Powell's assessment of the current inflation situation.

Quincy Crosby, Chief Global Strategist at LPL Financial, said, "This week's Fed meeting could determine market direction," adding, "Especially if the Fed signals that rates need to remain stable for a longer period, it will have an even greater impact."

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According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds futures market currently prices in a 99% probability that the Fed will hold rates steady at the March FOMC meeting. The likelihood of a rate cut of 0.25 percentage points or more in June has decreased to the 58% range from 71% a week ago.

Additionally, on the 20th, U.S. semiconductor company Micron will release its earnings report.

Government bond yields are steady. The U.S. 10-year Treasury yield, a global bond benchmark, is trading at 4.32%, up 2 basis points (1 bp = 0.01 percentage points) from the previous session. The 2-year U.S. Treasury yield remains at 4.7%, unchanged from the previous day.

International oil prices are on the rise. West Texas Intermediate (WTI) crude is up $0.21 to $81.25 per barrel, and Brent crude has increased $0.23 to $85.57 per barrel.