[New York Stock Market] Dow Surpasses 43,000 for the First Time... S&P 500 Also Closes at Record High

Major indices on the U.S. New York Stock Exchange closed higher on the 14th (local time), buoyed by a rally in technology stocks including Nvidia. The blue-chip-focused Dow Jones Industrial Average surpassed the 43,000 mark for the first time, reaching an all-time high. The S&P 500 index also hit a record high.

[Image source=Reuters Yonhap News]

At the New York Stock Exchange (NYSE) on the day, the blue-chip-centered Dow Jones Industrial Average closed at 43,065.22, up 201.36 points (0.47%) from the previous session. The large-cap-focused S&P 500 index rose 44.82 points (0.77%) to 5,859.85, and the tech-heavy Nasdaq index gained 159.75 points (0.87%) to close at 18,502.69.

All sectors except energy in the S&P 500 closed higher. The technology sector rally was particularly notable. Nvidia, the leader in artificial intelligence (AI) stocks, rose more than 2% to reach an all-time high, driving the tech rally. Trump Media & Technology Group, the parent company of Truth Social, surged over 18% as betting sites confirmed former President Donald Trump’s lead as the Republican candidate ahead of the November election. Bitcoin-related stocks, including Coinbase, rallied as Bitcoin prices surpassed $64,000 per coin.

On the other hand, Caterpillar fell about 2% after Morgan Stanley downgraded its investment rating to 'underweight.' Boeing also closed down over 1% following its earlier announcement of layoffs and the delay in the delivery of the 777X. Chinese-related stocks, including Alibaba, weakened amid disappointment over the Chinese government’s economic stimulus measures.

Investors monitored third-quarter corporate earnings, which began in earnest late last week, amid lower-than-usual trading volume due to Columbus Day. JP Morgan Chase and Wells Fargo, which kicked off the earnings season on the 11th, posted results exceeding expectations, fueling optimism in the stock market. On Tuesday the 15th, Bank of America (BoA), Goldman Sachs, and Johnson & Johnson are scheduled to release earnings. Morgan Stanley, United Airlines, Walgreens Boots Alliance, Netflix, and Procter & Gamble are also set to report this week.

According to Bank of America (BoA), about 30 S&P 500-listed companies have reported quarterly earnings so far, surpassing consensus earnings estimates by an average of around 5%. This exceeds the 3% beat recorded at a similar point last quarter. However, Bernstein forecasted that third-quarter earnings per share growth will fall short of the previous quarter.

Ross Mayfield, an investment strategist at Baird, said, "The market sentiment reaching an all-time high may be somewhat overstretched at the moment," adding, "It is not surprising that volatility increases in the last three to four weeks ahead of the election." However, he also emphasized expectations for a market rally over a three to six-month timeframe, citing interest rate cuts and a soft landing for the economy. John Stoltzfus, Chief Investment Strategist at Oppenheimer, also highlighted in an investor memo that despite uncertainties related to the November election and geopolitical risks from the Middle East, the S&P 500 index hit another record high, suggesting "there is room for further gains supported by economic recovery and healthy corporate growth."

This week, U.S. retail sales data will also be released. The market expects September retail sales to increase by 0.3% month-over-month. If retail sales exceed expectations following a surprise rise in employment, the U.S. economy’s sustained growth under a 'no landing' scenario is likely to gain stronger momentum. According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds (FF) futures market currently prices in an 86% probability that the Fed will cut rates by 0.25 percentage points at the November Federal Open Market Committee (FOMC) meeting. Fed Governor Christopher Waller said in remarks at a conference at Stanford University that day, "While I do not want to overreact to data, looking at the overall data suggests that the pace of rate cuts should be more cautious than at the September meeting."

The bond market was closed on the day due to Columbus Day. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street’s ‘fear gauge,’ fell more than 3% to the 19 level.

International oil prices declined due to OPEC’s downward revision of demand forecasts and disappointment over China’s economic stimulus measures. On the New York Mercantile Exchange, the near-month November delivery West Texas Intermediate (WTI) crude oil closed at $73.83 per barrel, down $1.73 (2.29%) from the previous trading day.