New York Stock Market Slightly Lower in Early Trading... 'Taking a Breather' Ahead of Earnings Announcements

Tesla, Amazon Earnings Released This Week
Dallas Fed President Supports Gradual Interest Rate Cuts
International Oil Prices Rise After Last Week's Decline

The three major indices of the U.S. New York stock market showed slight declines in early trading on the 21st (local time). After the Dow Jones Industrial Average and the S&P 500 posted six consecutive weeks of gains last week, the market appears to be taking a breather. This week, earnings reports from major companies such as Tesla and Amazon are scheduled.

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As of 9:47 a.m. in the New York stock market, the blue-chip-focused Dow Jones Industrial Average was down 0.12% from the previous trading day, standing at 43,223.5. The large-cap-focused S&P 500 index fell 0.06% to 5,860.99, and the tech-heavy Nasdaq index declined 0.03% to 18,484.91.

By individual stocks, Boeing rose 4.7% after reaching a tentative agreement with its union to increase wages by 35% over the next four years. Eyewear retailer Warby Parker gained 2.6% after investment bank Goldman Sachs upgraded its rating from 'neutral' to 'buy.' Tesla, which is releasing earnings this week, was down 1.11%.

Investors' attention this week is focused on corporate earnings announcements. Earnings reports from Tesla, Amazon, Boeing, General Motors (GM), and Coca-Cola are scheduled. Companies releasing earnings this week account for about 20% of the S&P 500. According to market research firm FactSet, 14% of S&P 500 companies have reported earnings so far, with 79% of those companies exceeding analysts' expectations. The future direction of the stock market is expected to be influenced by corporate earnings trends.

Mariya Baytman, Senior Multi-Asset Strategist at State Street Global Markets, said, "Stocks have been strong since early October, mainly supported by improved economic indicators and easing policies from global central banks. It is not surprising that investors are discussing corporate profits and (buy) position liquidations ahead of a busy earnings week."

While there are expectations that the stock market rally will continue, some express concerns that volatility could increase due to high valuations, uncertainty surrounding the U.S. presidential election, and geopolitical risks. Sam Stovall, Chief Investment Strategist at CFRA Research, predicted, "If the market does not gain confidence that the current high stock prices are justified, profit-taking movements to digest gains could appear quite rapidly."

This week also features speeches from Federal Open Market Committee (FOMC) members. Starting with remarks from Lori Logan, President of the Dallas Federal Reserve Bank, key officials including Neel Kashkari, President of the Minneapolis Fed, and Mary Daly, President of the San Francisco Fed, will deliver public speeches. President Logan expressed support for gradual interest rate cuts at an event held in New York. He stated, "If the economy moves as expected, a strategy of gradually lowering the policy rate to a more normal or neutral level will help manage risks and achieve goals."

U.S. Treasury yields are on the rise. The 10-year U.S. Treasury yield, a global bond yield benchmark, increased by 6 basis points (1 bp = 0.01 percentage points) to 4.13%, while the 2-year U.S. Treasury yield rose 2 basis points to 3.98%.

International oil prices, which had plunged more than 7% last week, are rising as concerns over supply reductions due to Middle East instability ease and demand slowdown forecasts in China moderate. West Texas Intermediate (WTI) crude oil rose $1.46 to $70.15 per barrel, and Brent crude, the global oil price benchmark, increased $1.32 to $74.38 per barrel.