New York Stock Market Mixed Ahead of Nvidia Earnings... Tesla Soars 7%

Nvidia Earnings to Be Released After Market Close on the 20th
Trump Considers Easing Autonomous Vehicle Regulations... Tesla Up
Russia-Ukraine Tensions Escalate, International Oil Prices Rise Nearly 2%

The three major indices of the U.S. New York Stock Exchange showed mixed movements in the early session on the 18th (local time), hovering around the flat line. Following the slowdown of the 'Trump rally' that accelerated after the presidential election on the 5th, investors are awaiting earnings reports from companies including AI superstar Nvidia this week.

Yonhap News

As of 9:59 a.m. in the New York stock market, the blue-chip-focused Dow Jones Industrial Average was trading at 43,354.35, down 0.21% from the previous trading day. The large-cap-focused S&P 500 index was down 0.02% at 5,869.62, while the tech-heavy Nasdaq index was up 0.07% at 18,693.73.

By individual stocks, Tesla surged 7%. The stock price soared following a Bloomberg report that President-elect Donald Trump is seeking to ease regulations on autonomous vehicles. Nvidia, which is scheduled to report earnings this week, fell 2.66% amid reports that its latest AI chip, Blackwell, is experiencing server overheating issues. CVS Health rose 3.06% after news of four additional board member appointments.

Last week, the New York stock market declined as the Trump rally cooled down. The Dow Jones Industrial Average fell 1.2%, while the S&P 500 and Nasdaq indices dropped 2.1% and 3.2%, respectively. Expectations for pro-business policies from President-elect Trump had pushed the market up, but investors took profits, giving back the gains. Federal Reserve Chair Jerome Powell also dampened investor sentiment on the 14th by indicating that the Fed would not rush to cut interest rates. Additionally, strong retail sales last month supported a robust economy, reducing expectations for rate cuts. October retail sales increased by 0.4% month-over-month, significantly exceeding the forecast of 0.3%.

According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds futures market currently prices a 58.4% chance that the Fed will cut rates by 0.25 percentage points at the December Federal Open Market Committee (FOMC) meeting. This is down from 65.3% a week ago and 76.8% a month ago. U.S. Treasury yields are also rising. The 10-year U.S. Treasury yield, a global bond rate benchmark, rose 3 basis points (1bp=0.01%) to 4.46% compared to the previous trading day, while the 2-year Treasury yield, sensitive to monetary policy, remained around 4.3%.

The key catalyst for the market direction this week will be Nvidia's earnings report, scheduled after the market close on the 20th. If Nvidia delivers better-than-expected results and outlook, it could provide a rebound opportunity for the market, which has been in a holding pattern. Wall Street is closely watching demand forecasts for Nvidia's latest AI chip, Blackwell.

Chris Larkin, Managing Director of Investments at Morgan Stanley eTrade, said, "Traders seem to be evaluating the potential impact of the new Trump administration's policies on the economy and the possibility that the Fed may slow the pace of rate cuts. This week, market attention will shift to earnings, particularly Nvidia's results, which could influence short-term market momentum."

In addition, Palo Alto Networks and retailers Walmart, Target, and Ross will release earnings this week. According to market research firm FactSet, 93% of S&P 500 companies have reported earnings so far, with three-quarters beating earnings per share (EPS) estimates and 61% exceeding revenue forecasts.

International oil prices are strong. The Biden administration's approval allowing Ukraine to use U.S.-supplied missiles to attack Russian mainland has heightened tensions between Russia and Ukraine. West Texas Intermediate (WTI) crude oil rose $1.27 (1.9%) to $68.19 per barrel, while Brent crude, the global oil price benchmark, increased $1.34 (1.89%) to $72.38 per barrel.