New York Stock Market Mixed in Early Trading... Cautious Ahead of Presidential Debate and Inflation Data

Harris and Trump Face Off in Tonight's TV Debate
Focus on Trade and Tax Policies Including Tariffs
Eyes on CPI on 11th and PPI on 12th Announcements

The three major indices of the U.S. New York stock market showed mixed movements in the early trading hours on the 10th (local time), hovering around the flat line. Investors are watching the market while awaiting the presidential debate scheduled for that night and the inflation data to be released the following day.

As of 9:48 a.m. in the New York stock market, the Dow Jones Industrial Average, centered on blue-chip stocks, was down 0.18% from the previous trading day at 40,755.6. The S&P 500, focused on large-cap stocks, was up 0.37% at 5,491.22, and the Nasdaq, centered on tech stocks, was trading 0.5% higher at 16,968.59.

By individual stocks, cloud platform company Oracle surged 13.79% after reporting quarterly earnings that exceeded expectations. News of a collaboration with Amazon Web Services (AWS) to provide data-driven services also boosted its stock price. Apple fell 1.68% despite unveiling its new product, the 'iPhone 16,' the previous day. The news of losing a lawsuit challenging the European Union (EU) fine also acted as a negative factor. On the other hand, Google, which also lost a lawsuit related to the EU fine like Apple, rose 0.94%. Nvidia, the AI leader, was up 0.61%.

The previous day’s market rebounded as bargain buying flowed in. After experiencing the worst week last week due to deteriorating manufacturing and employment indicators, a rebound buying sentiment emerged. Amid mixed concerns about a recession and expectations for a soft landing, investors are awaiting the last major indicator before the Federal Open Market Committee (FOMC) meeting scheduled for the 17th-18th, which is the inflation index.

On the 11th, the August Consumer Price Index (CPI) will be released. Last month’s CPI is expected to have risen 2.6% year-over-year, slowing down from the previous month’s increase of 2.9%. After the July CPI inflation rate entered the 2% range for the first time in 3 years and 4 months since March 2021 (2.6%), there are expectations that the inflation decline trend will continue. The August Producer Price Index (PPI), a wholesale price index, will be released the following day on the 12th. Last month’s PPI is expected to have risen 0.2% month-over-month, slightly exceeding July’s increase of 0.1%. If the CPI does not spike significantly beyond expectations, a rate cut at this month’s FOMC is considered certain.

With the presidential election two months away on November 5, market attention is focused on the first presidential TV debate between Democratic candidate Vice President Kamala Harris and Republican candidate former President Donald Trump, scheduled for 9 p.m. Eastern Time that night. Some hedge funds are liquidating existing positions to secure cash in preparation for increased volatility after the election.

Grace Peters, Chief Global Investment Strategist at JP Morgan Private Bank, said, "We really need to see what actually happens and what is likely to impact the market," adding, "We will be watching tariffs, trade policies, and taxes closely."

Wall Street expects market volatility to increase until the election. The seasonal weakness typically seen in September is also expected to worsen investor sentiment.

Rebecca Jung, Chief U.S. Equity and Derivatives Strategist at UBS AG, said, "Even a slight disappointment in upcoming economic data could cause a major headwind," and predicted, "The S&P 500 index could fall at least 10% from its one-month high."

Oh Seong Kwon, Equity and Quantitative Strategist at Bank of America (BoA), said, "We agree with the view that the market is likely to fluctuate at least until the election," diagnosing, "Macroeconomic indicators are weakening, especially in the manufacturing and commodities sectors, which account for 50% of the S&P 500’s earnings."

Government bond yields are steady. The U.S. 10-year Treasury yield, a global bond yield benchmark, and the 2-year Treasury yield, sensitive to monetary policy, are trading at levels of 3.69% and 3.65%, respectively, unchanged from the previous trading day.

International oil prices are falling due to expectations of weakened demand and oversupply. West Texas Intermediate (WTI) crude oil fell $0.42 (0.6%) from the previous trading day to $68.29 per barrel, and Brent crude, the global oil price benchmark, dropped $0.48 (0.67%) to $71.36 per barrel.