[New York Stock Market] Mixed Close Despite Inflation Slowdown... Dow Jones Hits Record High

US PCE Price Index Slows, Buying Sentiment Spreads
Investors Move Within Range Amid High-Price Concerns
Tech, AI, and Semiconductor Stocks Weaken

The major stock indices on the U.S. New York Stock Exchange closed mixed on the 27th (local time). The inflation indicator preferred by the Federal Reserve (Fed) slowed down more than expected, and the consumer sentiment index improved. However, investors seemed to be cautious about the high levels, resulting in narrow movements.

Traders are working at the New York Stock Exchange (NYSE) in the United States.
[Image source=EPA Yonhap News]

On that day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 42,313.00, up 137.89 points (0.33%) from the previous session. The Standard & Poor's (S&P) 500 index fell 7.20 points (0.13%) to 5,738.17, and the Nasdaq Composite Index dropped 70.70 points (0.39%) to close at 18,119.59. The Dow index extended its intraday gains to 42,628.32, setting another all-time high that day.

News that the U.S. Personal Consumption Expenditures (PCE) price index for August slowed more than expected sparked buying sentiment early in the session. The U.S. Department of Commerce announced that the August PCE price index rose 2.2% year-over-year, below the market forecast of 2.3%, and also slower than the previous month's 2.5% increase. On a month-over-month basis, it rose 0.1%, falling short of the previous month's and market-expected 0.2% increase.

The core PCE price index for August also rose 0.1% month-over-month, below the previous month's and expected 0.2% increase. The core PCE price index excludes volatile energy and food prices and is the Fed's preferred gauge for assessing inflation.

The improvement in the U.S. consumer sentiment index also eased recession concerns and boosted buying sentiment. The University of Michigan's final consumer sentiment index for September was recorded at 70.1. This is 1.1 points higher than the preliminary figure of 69.0 announced on the 13th and the highest since May this year. Compared to August's 67.9, it rose more than 3%.

The Dow, which is composed mainly of blue-chip stocks, at one point rose more than 1%. However, as major stock indices have been hitting new highs day after day, buying sentiment appeared to wane due to fatigue and concerns over high levels, leading to a surrender of gains or a shift to a downward trend. The S&P 500 and Dow indices have risen for three consecutive weeks including this week and closed higher in six of the past seven weeks.

Among the Dow components, all stocks except Microsoft, Amazon, Walmart, IBM, Intel, and 3M rose. Overall, selling pressure was stronger on technology stocks. AI and semiconductor-related stocks also deteriorated. Nvidia fell 2.13% amid a correction, and Broadcom dropped more than 3%. Other tech stocks such as ASML (-1.28%), AMD (-1.87%), and Qualcomm (-1.47%) also declined, though the drops were not large.

On the other hand, following a large-scale monetary stimulus by the Chinese government that caused the Shanghai Composite Index to surge, Chinese companies listed on the New York Stock Exchange also rose. Pinduoduo, the parent company of the online shopping mall Temu, jumped 4.62%, and JD.com rose more than 5%. Chinese search engine Baidu increased 2.54%, and travel company Trip.com rose 8.19%.

By sector, energy surged more than 2%, and utilities rose over 1%. In contrast, technology fell nearly 1%. The other sectors traded within a narrow range.