[New York Stock Market] Nasdaq Hits All-Time High... 3 Major Indexes Rise on Lowered Interest Rate Hike Possibility

Powell "Next Interest Rate Decision Will Not Be a Hike"

The three major indices of the New York stock market closed higher despite the impact of the April US Producer Price Index (PPI) exceeding market expectations. The Nasdaq index reached an all-time high. This was due to market attention on remarks by Jerome Powell, Chairman of the US Federal Reserve (Fed), who dismissed the possibility of an interest rate hike.

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On the 14th (local time), the Dow Jones Industrial Average at the New York Stock Exchange (NYSE) rose 126.60 points (0.32%) from the previous session to close at 39,558.11. Meanwhile, the S&P 500 index increased by 25.26 points (0.48%) to 5,246.68, and the Nasdaq index rose 122.94 points (0.75%) to 16,511.18. The Nasdaq index closed at an all-time high.

The US Department of Labor announced that the April PPI rose 0.5% month-over-month on a seasonally adjusted basis. This exceeded the market expectation of 0.3%. Despite the PPI slightly surpassing expectations, market investor sentiment remained robust.

This is interpreted as the market focusing on Fed Chairman Powell’s relatively less hawkish remarks that day. He said, "There are signs that the labor market is cooling down a bit. I do not think the next rate decision will be a hike," adding, "(April PPI) was higher than expected, but the March revision was lower. It should be seen as mixed rather than hot."

In the market, there are forecasts that the Fed might start cutting interest rates from September based on Powell’s remarks. According to the CME Group’s FedWatch tool, the probability of the Fed holding rates steady in September is 32.9%, while the probability of a 25 basis points (1bp=0.01%) cut is 49.7%.

The market is also paying close attention to the upcoming release of the US April Consumer Price Index (CPI). According to data compiled by The Wall Street Journal (WSJ), the April CPI is expected to rise 0.4% month-over-month and 3.4% year-over-year. This is similar to or slightly eased compared to March. The April core CPI is forecasted to increase 0.3% month-over-month and 3.6% year-over-year, representing a moderated level compared to the previous month.