[New York Stock Market] Semiconductor Stocks Plunge and Profit-Taking Sell-Off Lead to Broad Decline... Oil Prices Down Over 4%

NVIDIA down 4%, ASML down 16%
Profit-taking after Dow & S&P 500 hit record highs
September retail sales eyed... Expected 0.3% increase MoM
Oil prices fall 4% as concerns ease over Iran oil facility attack

The three major indices of the U.S. New York Stock Exchange all closed lower on the 15th (local time). This was due to profit-taking selling and a sharp decline in semiconductor stocks, including Nvidia, the leader in artificial intelligence (AI). The market is focusing on corporate earnings announcements this week and is awaiting the September retail sales data, which can gauge the U.S. economic situation.

[Image source=Yonhap News]

On this day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average closed at 42,740.42, down 324.8 points (0.75%) from the previous trading day. The large-cap-focused S&P 500 index fell 44.59 points (0.76%) to 5,815.26, and the tech-heavy Nasdaq index dropped 187.1 points (1.01%) to 18,315.59.

Following record highs for the Dow Jones Industrial Average and the S&P 500 the previous day, profit-taking selling emerged, causing the market to take a breather. Terry Sandborn, Chief Equity Strategist at U.S. Bank Wealth Management, diagnosed, "As the S&P 500 index reached an all-time high, there is a trend of rapid buying followed by quick selling at high prices."

By individual stocks, Nvidia, which hit a record high the previous day, fell 4.52%. The decline followed news that the U.S. government is considering setting country-specific limits on AI semiconductor exports by U.S. companies, including Nvidia. Dutch semiconductor equipment maker ASML plunged 16.26% amid expectations of reduced business exposure in China. UnitedHealth Group dropped 8.11% after lowering its annual profit forecast. Bank of America (BoA) rose 0.55% on earnings that exceeded market expectations. Goldman Sachs also reported earnings surpassing Wall Street forecasts but fell 0.07%.

Scott Kronut, U.S. equity strategist at Citigroup, said, "We have to acknowledge that the S&P 500 index is at least somewhat overvalued," but added, "If the news flow supports it, the upward trend can continue."

This week, the market is closely watching corporate earnings announcements and economic indicators that began in earnest late last week.

The key will be the September retail sales data to be released by the U.S. Department of Commerce on the 17th. Experts expect that last month's retail sales increased more than the 0.3% rise in August (which had a 0.1% increase). Some on Wall Street, including BoA, speculate that retail sales in the previous month rose by 0.8%. If retail sales prove stronger than expected following a significant increase in September nonfarm payrolls, the no-landing scenario?where the U.S. economy continues to grow without a recession?is likely to spread.

Corporate earnings announcements will continue, with Taiwan's TSMC and Netflix releasing results on the 17th. Corporate earnings will also serve as a gauge of the U.S. economy and influence the stock market direction.

Meanwhile, the bond market, which was closed the previous day for Columbus Day, resumed trading, showing mixed trends in government bond yields by maturity. The U.S. 10-year Treasury yield, a global benchmark for bond yields, fell 9 basis points (1 bp = 0.01 percentage points) from the previous trading day to around 4.03%. The 2-year Treasury yield rose slightly to about 3.95%.

International oil prices dropped more than 4%. West Texas Intermediate (WTI) crude fell $3.25 (4.4%) to $70.58 per barrel, and Brent crude, the global oil price benchmark, declined $3.21 (4.14%) to $74.25 per barrel. The price drop was driven by eased supply concerns after reports that Israel conveyed to the U.S. its intention to target military facilities rather than Iranian nuclear or oil facilities.