[New York Stock Market] Rising on Oil Price Drop and Tech Stock Strength... Dow and S&P 500 Hit New Highs Again

Tech Stocks Rise Amid Middle East Stability
September FOMC Minutes Released...Divided on Rate Cut Size
November Rate Hold Probability Rises to 20% Range
Focus on Oct 10 CPI, Nov 11 PPI Reports

The three major indices of the U.S. New York Stock Exchange all closed higher on the 9th (local time). As international oil prices fell for the second consecutive day, investors shook off concerns about instability in the Middle East, and the rise in tech stocks led the market upward. The market is awaiting the release of the September Consumer Price Index (CPI) the following day.

On this day in the New York stock market, the Dow Jones Industrial Average, centered on blue-chip stocks, rose 431.63 points (1.03%) from the previous trading day to close at 42,512, and the S&P 500 index, focused on large-cap stocks, increased by 40.91 points (0.71%) to close at 5,792.04, both reaching all-time highs. The tech-heavy Nasdaq index closed at 18,291.62, up 108.7 points (0.6%).

Tech stocks showed strength and pushed the indices higher. Apple rose 1.67%, while Amazon and Microsoft (MS) increased by 1.34% and 0.66%, respectively. Super Micro Computer jumped 4.28%. Alphabet, Google's parent company, fell 1.59% following news that the Department of Justice is reviewing a potential breakup of the company. According to Bloomberg, the U.S. Department of Justice is considering proposing to the Washington D.C. federal court a plan to divest some of Google's businesses to reduce the harm caused by its monopoly in the online search market. Earlier, the court ruled in August that Google had violated antitrust laws.

Solita Marcelli, Chief Investment Officer (CIO) of UBS Global Wealth Management in the U.S., said, "Recently, tech stocks have experienced volatility in both directions, but the downturns are buying opportunities," adding, "We maintain a positive outlook on the technology sector and artificial intelligence (AI). Investors should use volatility to increase exposure to AI stocks."

International oil prices, which had surged due to Middle East tensions, also fell for the second consecutive day, supporting investor sentiment. West Texas Intermediate (WTI) crude oil closed at $73.24 per barrel, down $0.33 (0.5%) from the previous day, while Brent crude, the global oil price benchmark, ended at $76.58 per barrel, down $0.60 (0.8%).

On the same day, the U.S. Federal Reserve released the minutes of the September Federal Open Market Committee (FOMC) meeting, where it initiated a 'big cut' (0.5 percentage point rate cut) to start a monetary easing cycle. The minutes stated, "Some participants preferred lowering the target range by 25 basis points (1bp = 0.01 percentage points) at this meeting, and several indicated they could support such a decision," and "Several participants noted that a 25bp cut would be consistent with a gradual path toward monetary policy normalization." This revealed differences of opinion among Fed officials regarding the size of the rate cut.

Additionally, with nonfarm payrolls unexpectedly increasing last month, market expectations have shifted toward a slower pace of rate cuts. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the federal funds futures market now prices a 20.6% chance of the Fed holding rates steady next month, up from 14.8% the day before. A week ago, the probability of a hold was 0%. The likelihood of a 0.25 percentage point cut in November has decreased from 85.2% to 79.4%, while the chance of a 0.5 percentage point cut remains at 0%.

Adam Crisafulli, an investment analyst at Vital Knowledge, analyzed, "There is a tense tug-of-war between the tailwinds of stimulus, disinflation (slowing inflation), resilient growth, and healthy corporate earnings, and the headwinds of high valuations (stock prices)."

Investors are focusing on inflation indicators. The Consumer Price Index (CPI) will be released on the 10th, followed by the Producer Price Index (PPI) on the 11th. The September CPI is expected to have risen 2.3% year-over-year, further slowing from 2.5% in August.

Corporate earnings announcements are also beginning in earnest. Delta Air Lines will report on the 10th, and JP Morgan Chase on the 11th.

Government bond yields are rising. The yield on the U.S. 10-year Treasury note, a global benchmark for bond yields, rose 4 basis points from the previous day to 4.07%, while the yield on the U.S. 2-year Treasury note, which is sensitive to monetary policy, increased 4 basis points to 4.02%.