New York Stock Market Takes a Breather Amid Trump Rally Fatigue... Tesla and DJT Down

Mixed Trends in Early Trading Range
Tesla Down 1.79%, Trump Media Down 9.37%
Fed Officials' Remarks in Focus... CPI Release on 13th

The three major indices of the U.S. New York Stock Exchange showed mixed movements near the flat line in early trading on the 12th (local time). After hitting record highs the previous day during the 'Trump rally,' the market appeared to take a breather amid fatigue from the recent rapid rise. Investors are awaiting the inflation data to be released the following day.

As of 10:38 a.m. in the New York stock market, the Dow Jones Industrial Average, centered on blue-chip stocks, was down 0.2% from the previous trading day at 44,202.69. The S&P 500, focused on large-cap stocks, was down 0.03% at 5,999.38, while the tech-heavy Nasdaq was up 0.12% at 19,321.57.

By individual stocks, Trump beneficiary stocks were giving back gains from the previous day. Tesla, led by CEO Elon Musk who had early supported Donald Trump, the 47th President-elect of the United States, was down 1.79%. Trump Media & Technology (DJT) plunged 9.37%. AI leader Nvidia was up 2.41%, and Meta, Facebook's parent company, rose 0.62%.

The previous day, the New York stock market hit all-time highs across the three major indices, buoyed by the pro-business effect of President-elect Trump. The Dow Jones Industrial Average surpassed 44,000 for the first time ever, and the S&P 500 exceeded 6,000. Larry Tentarelli, founder of Blue Chip Daily Trend Report, said, "The market is closely watching both the election and the policies to be implemented," adding, "This is similar to what we saw in 2016 when Trump won his first election."

On Wall Street, there are also views that the recent sharp rise in the market may slow due to profit-taking selling. Dan Wontrobski, analyst at Janney Montgomery Scott, said, "We are watching for potential profit-taking and even corrections in U.S. stocks in the first quarter of the new year," adding, "The upward momentum remains strong and investor sentiment is favorable, but stocks have been overbought multiple times over various periods."

Investors' attention is focused on speeches by Federal Reserve (Fed) officials today. With expectations that President-elect Trump's policies such as tariff increases and tax cuts on income and corporations could stimulate inflation and interest rate hikes, eyes are on what messages Fed officials will deliver. Remarks are scheduled from Fed Governor Christopher Waller, Richmond Fed President Thomas Barkin, Minneapolis Fed President Neel Kashkari, and Philadelphia Fed President Patrick Harker. Particularly, with Trump having repeatedly mentioned firing Fed Chair Jerome Powell during his candidacy, it is noteworthy whether Fed officials will emphasize the independence of monetary policy.

The inflation data to be released the next day is also a key point to watch. On the 13th, the October Consumer Price Index (CPI) will be announced, followed by the October Producer Price Index (PPI) on the 14th. The critical question is whether the inflation data will support a disinflation trend (a decline in the inflation rate). Last month’s CPI rose 2.4% year-over-year, maintaining the same level as in September, while the PPI is expected to have increased 0.2% month-over-month, expanding from September’s 0%.

Government bond yields are on the rise. The U.S. 10-year Treasury yield, a global bond yield benchmark, is currently up 2 basis points (1bp = 0.01 percentage points) from the previous trading day at 4.37%, while the 2-year Treasury yield, sensitive to monetary policy, has risen 6 basis points to 4.31%.

The dollar is also strengthening. The Dollar Index, which measures the dollar’s value against six major currencies, is up 0.42% from the previous trading day at 105.89.

International oil prices, which had fallen due to OPEC’s downward revision of oil demand forecasts and disappointment over China’s economic stimulus measures, are rising again. West Texas Intermediate (WTI) crude oil is trading at $68.53 per barrel, up $0.49 (0.72%) from the previous day, and Brent crude, the global oil price benchmark, is up $0.50 (0.7%) at $72.33 per barrel.