[New York Stock Market] Mixed Close Amid Steady Consumer Spending and Semiconductor Strength... Dow Hits Record High

September Retail Sales Up 0.4% MoM, Exceeding Expectations
Rising Government Bond Yields Limit Stock Market Gains
Unemployment Claims Decrease by 19,000 from Previous Week

The three major indices of the U.S. New York Stock Exchange closed mixed on the 17th (local time) within a narrow range. Although the release of robust retail sales data raised expectations for a soft landing of the U.S. economy, bond yields rose due to a partial retreat in rate cut expectations, causing the stock market to give up some of its gains. Semiconductor stocks, which had recently plunged sharply, showed strength.

On that day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average closed at a record high of 43,239.05, up 161.35 points (0.37%) from the previous trading day. The large-cap-focused S&P 500 index briefly hit an all-time high during the session but turned lower to close down 1 point (0.02%) at 5,841.47. The tech-heavy Nasdaq index ended the day up 6.53 points (0.04%) at 18,373.61.

By individual stocks, semiconductor shares showed strength. Taiwan's TSMC surged 9.79% after posting nearly 14 trillion won in net profit for the third quarter this year. AI leader Nvidia rose 0.89%, and Intel gained 0.58%.

The retail sales data released that morning supported expectations for a soft landing of the U.S. economy. According to the U.S. Department of Commerce, September retail sales totaled $714.4 billion, up 0.4% from the previous month. This exceeded both the August figure (0.1%) and the Dow Jones forecast (0.3%). Among the 13 retail categories, 10 showed increases, including general merchandise stores (4%), clothing and accessories stores (1.5%), and health and personal care stores (1.1%). Conversely, sales declined in electronics stores (-3.3%), gas stations (-1.6%), and furniture stores (-1.4%). Retail sales account for two-thirds of the U.S. economy. The stronger-than-expected retail sales data last month suggested that the U.S. economy continues to maintain solid growth.

The market began to weigh slightly more on the possibility of the Federal Reserve (Fed) holding rates steady next month, even as it priced in a 0.25 percentage point rate cut. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the probability of the Fed holding rates steady in November rose from 6.3% the previous day to 11.7% on the day. The chance of a 0.25 percentage point rate cut fell from 93.7% to 88.3% over the same period. While the 'small cut (0.25 percentage point rate cut)' outlook remains overwhelmingly dominant, some are increasingly expecting a pause.

This led to a rise in bond yields, which limited the stock market's gains. The benchmark 10-year U.S. Treasury yield rose 7 basis points (1bp = 0.01 percentage point) to 4.09% compared to the previous trading day, while the 2-year Treasury yield, sensitive to monetary policy, increased 4 basis points to 3.97%.

Matthew Weller, Chief of Global Research at Forex.com and City Index, said, "The likelihood that the Fed will pause rate cuts in November is low, but the economic reports to be released by then are expected to show a stronger-than-expected U.S. economy," adding, "Regardless of the Fed's decision next month, the 2025 rate outlook is higher than it has been in recent weeks."

Employment data also eased concerns about a cooling labor market. According to the U.S. Department of Labor, initial jobless claims in the U.S. fell by 19,000 to 241,000 for the week of October 6-12, matching market expectations. Continuing claims, which count those claiming unemployment benefits for at least two weeks, were 1,867,000 for the week of September 29 to October 5. This was higher than the revised previous week's figure of 1,858,000 but below the market forecast of 1,870,000.

David Russell, Global Market Strategist at TradeStation, analyzed, "Thanks to American consumers, the economy continues to accelerate, and with fuel prices falling, the improvement effect will be even greater," adding, "Today's data shows that the likelihood of a recession has decreased." He further emphasized, "Santa might come to the stock market this year. In fact, he might already be here."

International oil prices rose slightly on news of a decline in U.S. crude oil inventories. West Texas Intermediate (WTI) crude closed at $70.67 per barrel, up $0.28 (0.4%) from the previous trading day, while Brent crude, the global oil price benchmark, ended at $74.45 per barrel, up $0.23 (0.31%).