[New York Stock Market] S&P 500 and Nasdaq Rise for Second Day... International Oil Prices Hit Lowest in Nearly 3 Years

Presidential Debate and August CPI Announcement Awaited
Tech Stocks Rise on Bargain Buying
Financial Stocks Weak on Interest Rate Cut Outlook
Oil Prices Plunge 4% on OPEC Lowered Crude Demand

The three major indices of the U.S. New York stock market closed mixed on the 10th (local time). Ahead of the presidential debate scheduled for 9 p.m. Eastern Time and the inflation data release the following day, investors showed a strong mood to attempt a rebound after last week's sharp market drop. International oil prices fell to their lowest level in nearly three years on forecasts that U.S.-China economic slowdown would reduce crude oil demand more than initially expected.

On this day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average closed at 40,736.96, down 92.63 points (0.23%) from the previous trading day. The large-cap-focused S&P 500 index rose 24.47 points (0.45%) to 5,495.52, and the tech-heavy Nasdaq index increased 141.28 points (0.84%) to 17,025.88, marking its second consecutive day of gains.

By individual stocks, technology shares rose. Nvidia gained 1.53%. Microsoft (MS) jumped 2.09%, and Alphabet, Google's parent company, increased by 0.31%. U.S. semiconductor company AMD was up 3.39%. On the other hand, financial stocks declined amid expectations that the Federal Reserve's (Fed) interest rate cuts are imminent, which could worsen future earnings. JPMorgan plunged 5.19% after indicating that net interest income next year would be unfavorable due to rate cuts. Goldman Sachs and Capital One fell 4.39% and 3.23%, respectively. Cloud platform company Oracle surged 11.47% after reporting quarterly earnings that exceeded expectations. The news that Oracle would collaborate with Amazon Web Services (AWS) to provide data-driven services also boosted its stock price.

This week, investors are awaiting inflation data to be released over two consecutive days starting on the 11th. These are the last major indicators before the September Federal Open Market Committee (FOMC) meeting, where rate cuts are widely expected. 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 from the previous month's increase of 2.9%. On the following day, the 12th, the August Producer Price Index (PPI) will be published. The wholesale price index (PPI), which influences the retail price index (CPI) with a time lag, is expected to have risen 0.2% in August compared to the previous month, slightly exceeding July's 0.1% increase. If the CPI does not spike significantly beyond expectations, interest rate cuts at the FOMC meeting on the 17th-18th are almost certain.

Samir Samana, Chief Global Market Strategist at Wells Fargo Investment Institute, analyzed, "If the (inflation) data cools down, the Fed may have room to cut rates further, but at the same time, there is a risk that it signals the economy is slowing faster than expected."

Market attention is also focused on the big event of the day, the presidential debate held in Philadelphia, Pennsylvania. Democratic presidential candidate Vice President Kamala Harris and Republican candidate former President Donald Trump will face off in a TV debate for the first time since the Democratic presidential candidate replacement. Some hedge funds are liquidating existing positions to secure cash in preparation for election uncertainties.

Grace Peters, Chief Global Investment Strategist at JPMorgan Private Bank, stated, "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 increased market volatility until the election. The fact that September has historically been a weak month seasonally 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 indicators could cause a major headwind," and predicted, "The S&P 500 index is expected to fall at least 10% from its one-month high." Kwon Oh-sung, Equity and Quant Strategist at Bank of America (BoA), agreed, saying, "We believe the market is likely to fluctuate at least until the election," and diagnosed, "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 falling. The U.S. 10-year Treasury yield, a global bond yield benchmark, dropped 5 basis points (1bp = 0.01 percentage points) from the previous trading day to 3.64%, while the 2-year Treasury yield, sensitive to monetary policy, traded down 6 basis points to around 3.6%.

International oil prices declined after the Organization of the Petroleum Exporting Countries (OPEC) lowered its oil demand forecasts for this year and next year. West Texas Intermediate (WTI) crude fell $2.96 (4.31%) to $65.75 per barrel, and Brent crude, the global oil price benchmark, dropped $2.65 (3.69%) to $69.19 per barrel. Brent crude fell to its lowest level in 2 years and 9 months since December 2021.