New York Stock Market Mixed in Early Trading... S&P 500 and Nasdaq Rise on Nvidia Rebound

NVIDIA Rises 2.5% Early Session
Bowman Fed Director: "Rate Cut Inappropriate Now"
May PCE Inflation Data Released on 28th in Focus

The three major indices of the U.S. New York stock market showed mixed trends in early trading on the 25th (local time). Nvidia, which fell nearly 7% the previous day, rebounded by more than 2%, driving gains in the S&P 500 and Nasdaq indices. Investors are awaiting the release of the Personal Consumption Expenditures (PCE) price index scheduled for this week.

As of 9:48 a.m. at the New York Stock Exchange (NYSE) on the day, the Dow Jones Industrial Average was down 0.21% from the previous close, standing at 39,328.5. The large-cap-focused S&P 500 index was up 0.21% at 5,459.42, and the tech-heavy Nasdaq index was trading 0.64% higher at 17,608.61.

By individual stocks, Nvidia rose 2.46%. After falling 6.68% the previous day, marking its largest drop since April 19, it is now rebounding. Super Micro Computer was up 1.03%, while Qualcomm and Broadcom increased by 0.56% and 0.48%, respectively. SolarEdge Technologies fell 15.5% following the announcement of a $300 million convertible bond issuance plan. Pool Corporation declined 6.88% after lowering its earnings outlook.

Jeff DeGraaf, head of technical analysis at Renaissance Macro Research, said, "The good news is that Nvidia is still in a long-term uptrend," adding, "In my view, this kind of correction is probably a buying opportunity, and investors should calm their sentiment."

The market is focusing on the May PCE price index to be released on the 28th. With both the Consumer Price Index (CPI) and Producer Price Index (PPI) growth rates easing last month, the PCE inflation is also expected to have slowed. The market expects the May core PCE price to rise 0.1% month-over-month and 2.6% year-over-year, both below the previous month's figures of 0.2% and 2.8%. If the slowdown in the core PCE price, the inflation gauge most closely watched by the Federal Reserve (Fed), is confirmed, expectations for interest rate cuts will rise, likely leading to a continued rally in the New York stock market.

Meanwhile, Fed Governor Michelle Bowman dismissed the possibility of an interest rate cut within this year. In materials distributed ahead of her speech in London on the 25th (local time), Bowman said, "We have not yet reached the appropriate time to lower the policy rate." She explained, "If data show inflation consistently moving toward the 2% target, it would be appropriate to gradually lower the federal funds rate to prevent monetary policy from becoming excessively restrictive," but added, "I do not expect a rate cut this year and have pushed the timing of any cut into the future."

Regarding inflation outlook, she assessed that there are "many upside risks" and even mentioned the possibility of further rate hikes. She stated, "If inflation progress stalls or reverses, I am willing to raise the federal funds rate target range at upcoming meetings."

Additionally, Bowman emphasized that "the path of U.S. monetary policy over the next few months is likely to differ from that of other advanced economies," highlighting that it will not be swayed by major countries like the ECB that have started cutting rates. Earlier, the ECB lowered its benchmark interest rate by 0.25 percentage points to 3.75% on the 6th.

On the 28th, the final figure for U.S. first-quarter Gross Domestic Product (GDP) and last week's initial jobless claims will also be released. The final GDP figure is expected to match the preliminary estimate of an annualized 1.3% increase quarter-over-quarter. Initial jobless claims are expected to have slightly increased to 240,000 from 238,000 the previous week.

Corporate earnings announcements will continue. Micron, FedEx, Walgreens Boots Alliance, and Nike are among those reporting results this week.

U.S. Treasury yields are steady. The 2-year Treasury yield, sensitive to monetary policy, and the 10-year Treasury yield, a global bond benchmark, have risen slightly, trading at around 4.73% and 4.25%, respectively.

International oil prices are slightly down. West Texas Intermediate (WTI) crude oil is trading at $81.44 per barrel, down $0.19 (0.2%) from the previous session, while Brent crude, the global oil price benchmark, is down $0.20 (0.2%) at $85.81 per barrel.