[New York Stock Market] Rise Driven by 'Cyclical Stocks' Instead of Nvidia... Alphabet Down 4.56%

Investors Shift from Tech Stocks to Economic Recovery Beneficiaries
'Solid Earnings' Nvidia Bounces Back 0.53% Despite Decline
Alphabet Plummets on Google's Potential Forced Sale of Chrome

The three major indices of the U.S. New York Stock Exchange all closed higher on the 21st (local time). Instead of Nvidia, whose stock price had been sluggish despite its surprise earnings the previous day, investors shifted their focus to beneficiaries of economic revitalization, leading the previously declining market to successfully rebound.

On that day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average closed at 43,870.35, up 461.88 points (1.06%) from the previous trading day. The large-cap-focused S&P 500 index rose 31.6 points (0.53%) to 5,948.71, and the tech-heavy Nasdaq index ended trading at 18,972.42, up 6.28 points (0.03%).

Investors shifted their attention from tech stocks to cyclical stocks. Optimism about the U.S. economy and the expectation that regulatory easing under President-elect Donald Trump could lead to improved corporate earnings drew renewed attention. Mark Malek, Chief Investment Officer (CIO) at Seibert, said, "This week, everyone is reconsidering the Trump trade," adding, "People are taking the Trump trade more seriously, and it's not enough to just say 'this sector is doing well'; some questions need to be answered."

By stock, financial stocks expected to benefit from deregulation under Trump's second term rose. Goldman Sachs jumped 2.46%, while JPMorgan Chase and Bank of America (BoA) increased by 1.65% and 0.87%, respectively. Construction heavy equipment maker Caterpillar rose 2.12%, and building materials distributor Home Depot gained 2.61%. The Russell 2000 index, composed mainly of small- and mid-cap stocks, rose 1.65%. Alphabet, Google's parent company, plunged 4.56% after the U.S. Department of Justice requested the Washington D.C. federal court to order the forced sale of Chrome as a remedy to Google's search market monopoly. Bitcoin, the leading cryptocurrency, was trading at 98,112.63 at 4:39 p.m. Eastern Time, up 3.83% from the previous day, inching closer to the $100,000 mark. The rise accelerated as Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC) and a cryptocurrency regulation advocate, announced his intention to resign on the first day of Trump's second term.

Nvidia's stock, which reported earnings after the previous day's market close, initially fell but closed up 0.53%. Despite reporting earnings that exceeded Wall Street expectations, the stock struggled due to the market's already high expectations. Nvidia posted revenue of $35.08 billion and adjusted earnings per share (EPS) of $0.81 for the third quarter of fiscal year 2025 (August to October), surpassing forecasts of $33.16 billion and $0.75, respectively. Compared to a year ago, revenue surged 94%, and net income jumped 109%. The fourth-quarter revenue forecast was $37.5 billion, with an expected fluctuation of around 2%, also exceeding market expectations of $37.08 billion.

Eric Clark, portfolio manager at National Dynamic Brands Fund, analyzed, "Investors may buy during a bear market, but traders might reduce stock exposure if there are no earnings beats and guidance upgrades for several quarters." He added, "When growth and momentum investors leave the market, there is generally a trace of decline."

The labor market remained robust. According to the U.S. Department of Labor on that day, initial jobless claims for the week of November 10-16 fell by 6,000 from the revised previous week to 213,000, marking the lowest level in seven months since April. This also beat the expert forecast of 220,000 by 7,000. Economists expect jobless claims to stabilize around the current level in the short term.

Tensions between Russia and Ukraine are escalating further. After Ukraine launched missiles supported by the U.S. and the U.K. at Russian military targets on the 19th and 20th, Russia responded by firing an intercontinental ballistic missile (ICBM) toward Ukraine on the same day, raising the level of attacks between the two countries.

Government bond yields are on the rise. The U.S. 10-year Treasury yield, a global bond yield benchmark, fell 2 basis points (bp) from the previous day to 4.42%, while the 2-year Treasury yield, sensitive to monetary policy, rose 4 bp to 4.35%.