New York Stock Market Rises on Strong US GDP and Unemployment Claims Data... Nasdaq Up 0.45%

Q2 GDP Growth Rate 3%... Solid Consumption Base
Weekly Unemployment Claims 218,000 'Below Expectations'
Focus on PCE Inflation Data Release on 27th

The three major indices of the U.S. New York Stock Exchange showed an upward trend in early trading on the 26th (local time). The robust U.S. economy was confirmed through economic growth rates and unemployment claims, supporting investor sentiment.

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As of 10:48 a.m. in the New York stock market that day, the Dow Jones Industrial Average, centered on blue-chip stocks, was trading at 42,134.28, up 0.52% from the previous trading day. The S&P 500 index, focused on large-cap stocks, rose 0.4% to 5,745.34, and the Nasdaq index, centered on technology stocks, was up 0.45% at 18,163.88.

The U.S. Department of Commerce announced that the final GDP growth rate for the second quarter of this year was recorded at an annualized 3% compared to the previous quarter. This level met expectations and was nearly double the first quarter's 1.6%. It also significantly exceeded the U.S. potential growth rate, estimated to be in the high 1% range. The U.S. releases GDP growth rates in three stages: advance, preliminary, and final. The strong consumption base is analyzed to have contributed to the solid growth in the second quarter.

Last week's unemployment claims decreased compared to the previous week. According to the U.S. Department of Labor, new unemployment claims for the week of September 15-21 totaled 218,000. This was 40,000 fewer than the revised figure of 222,000 for the previous week and also below experts' expectations of 224,000. Continuing claims, which count those claiming unemployment benefits for at least two consecutive weeks, reached 1,834,000 for the week of September 8-14. This exceeded both the revised previous week's figure of 1,821,000 and market expectations of 1,828,000.

Chris Larkin, Head of Trading and Investment at Morgan Stanley E*TRADE, said, "Even if there are issues in the labor market, they may not appear in the weekly unemployment claims, and as always, the monthly jobs report will play a significant role in market sentiment." He added, "However, until contrary evidence emerges, these (unemployment claims) figures will maintain hopes for a soft landing."

The market is focusing on the August Personal Consumption Expenditures (PCE) price index, scheduled for release on the 27th. The PCE price index is expected to have risen 0.1% month-over-month and 2.3% year-over-year last month. If the pace of PCE inflation slowdown eases rapidly, expectations for a big rate cut by the U.S. Federal Reserve (Fed) in November are likely to spread further.

Vanguard's Chief Economist Joe Davis said, "The Fed is more concerned about growth than they have revealed," adding, "We believe they will act more aggressively in the short term."

Investor expectations regarding the size of the rate cut at the next FOMC meeting are sharply divided. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the federal funds futures market on that day reflected a 50% probability of a 0.25 percentage point rate cut and a 50% probability of a 0.5 percentage point cut at the November FOMC regular meeting.

By stock, U.S. semiconductor company Micron is up 14.76% after announcing earnings and sales forecasts that exceeded market expectations. Other semiconductor stocks, Applied Materials and Lam Research, are up 4.34% and 4.3%, respectively.

Government bond yields are on the rise. The U.S. 10-year Treasury yield, a global bond yield benchmark, is trading at 3.81%, up 2 basis points from the previous trading day, while the U.S. 2-year Treasury yield, sensitive to monetary policy, is trading at 3.61%, up 5 basis points from the previous day.

International oil prices are declining due to reports of oil-producing countries' plans to increase production. West Texas Intermediate (WTI) crude oil is down $2.31 (3.3%) from the previous trading day, trading at $67.38 per barrel, and Brent crude, the global oil price benchmark, is down $2.26 (3.1%) at $71.20 per barrel.