[New York Stock Market] Mixed Close Amid PPI Relief... Nasdaq Rises 1.7% on Tech Stock Rally

March PPI Below Market Expectations
NVIDIA Up 4.11%... Amazon Hits Record High

The three major indices of the U.S. New York stock market closed mixed on the 11th (local time). After the market plunged sharply the previous day due to the March Consumer Price Index (CPI) shock, some relief spread as the Producer Price Index (PPI) came out close to expectations, leading to a rally in tech stocks.

[Image source=Yonhap News]

On this day at the New York Stock Exchange (NYSE), the blue-chip-focused Dow Jones Industrial Average fell 2.43 points (0.01%) from the previous trading day to close at 38,459.08. The large-cap-focused S&P 500 rose 38.42 points (0.74%) to 5,199.06, and the tech-heavy Nasdaq index gained 271.84 points (1.68%) to finish at 16,442.2.

By individual stocks, tech shares showed strength. The "Artificial Intelligence (AI) superstar" Nvidia jumped 4.11% compared to the previous trading day. Amazon, the world's largest e-commerce company, rose 1.67% to $189.05, marking an all-time high. Alphabet, Google's parent company, increased by 1.99%, and Apple surged 4.33%, posting the largest gain. Nike rose 3.37% after Bank of America (BoA) upgraded its investment rating to "buy." CarMax, a used car sales platform, fell 9.23% following disappointing earnings.

The market reacted positively to the fact that wholesale prices did not rise sharply in March. The U.S. Department of Labor reported that last month's PPI rose 0.2% month-over-month and 2.1% year-over-year, below market expectations of 0.3% and 2.2%, respectively. However, the year-over-year increase expanded from 1.6% the previous month, marking the highest level in 11 months since April last year. The core PPI, which excludes volatile energy and food prices to show the underlying inflation trend, rose 0.2% month-over-month and 2.4% year-over-year. Market forecasts were 0.2% and 2.3%, respectively, so the year-over-year increase exceeded expectations.

The wholesale price index PPI affects the retail price index CPI with a time lag. Although PPI recorded its highest level in 11 months, the market focused on the fact that the PPI increase rate was below expert expectations.

The March CPI shock announced the previous day also appears to have calmed somewhat. The March CPI rose 0.4% month-over-month and 3.5% year-over-year, exceeding expert forecasts of 0.3% and 3.4%. The core CPI, the Fed's most closely watched indicator, increased 0.4% month-over-month and 3.8% year-over-year, also surpassing market expectations of 0.3% and 3.7%.

Michael Shaul, CEO of Marketfield Asset Management, said, "I understand that the PPI report will provide some relief, but there is nothing encouraging in it," adding, "The best thing is that there is no new bad news."

Jamie Cox, Managing Partner at Harris Financial Group, analyzed, "Inflation data is noisy, and the market reflects this reality. Clear signs of disinflation are appearing in many places, but the last mile in the fight against inflation will be the most difficult."

Comments from Fed officials continued on this day. John Williams, President of the New York Federal Reserve Bank, said a day after the March CPI release that there is no need to change monetary policy in the short term. This aligns with the views of Fed officials expressed in the minutes of the March Federal Open Market Committee (FOMC) meeting released the previous day, who expressed concerns about the pace of inflation slowdown.

The U.S. employment data released on this day showed continued strength. According to the Department of Labor, new unemployment claims for the week of March 31 to April 6 totaled 211,000, below the expert forecast of 216,000 and down 11,000 from the previous week’s 222,000.

This week, financial sector earnings will be announced one after another. Large banks such as JPMorgan, Wells Fargo, and Citigroup will release their results the following day.

U.S. Treasury yields showed mixed movements. The 2-year Treasury yield, sensitive to monetary policy, fell 1 basis point (1 bp = 0.01 percentage point) to 4.95%. The 10-year Treasury yield, a global bond yield benchmark, rose 2 basis points to 4.58%.

International oil prices declined. The U.S.-led non-OPEC production increase offset Middle East instability concerns. West Texas Intermediate (WTI) crude fell $1.19 (1.4%) to $85.02 per barrel, and Brent crude dropped $0.74 (0.8%) to close at $89.74.