[New York Stock Market] "Thank you Nvidia" Rally... Alphabet Earnings Slump and Tariff Threats Weighed Down

Nvidia Surges Over 5%, Leading Market Rebound
Alphabet's Poor Earnings and China Big Tech Retaliation Concerns Eased
Mixed Employment Indicators... Focus on Jobs Report on the 7th

The three major indices of the U.S. New York Stock Exchange all closed higher on the 5th (local time). The market, which had been falling due to Alphabet's poor earnings and concerns over a tariff war triggered by Trump, rebounded thanks to AI leader Nvidia and others. Nvidia surged more than 5%.

On that day in the New York stock market, the Dow Jones Industrial Average (Dow Index), centered on blue-chip stocks, closed at 44,873.28, up 317.24 points (0.71%) from the previous trading day. The S&P 500 Index, focused on large-cap stocks, rose 23.6 points (0.39%) to 6,061.48, and the Nasdaq Index, centered on tech stocks, ended trading at 19,692.33, up 38.31 points (0.19%).

By stock, Nvidia jumped 5.35%. Super Micro Computer rose 7.99%. The stocks of both companies soared on news that Super Micro Computer would unveil an AI data center system equipped with Nvidia's AI chip, Blackwell. On the other hand, Alphabet, which announced disappointing cloud sales the previous day, plunged 6.94%. Semiconductor company AMD also fell 6.27% due to data center sales that fell short of market expectations. Apple declined 0.14% on news that China, which has started a tariff war with the U.S., is preparing an antitrust investigation into App Store fees and practices.

As investors keep an eye on President Donald Trump's tariff threats, market volatility is increasing. Just in the morning, investor sentiment in tech stocks sharply froze due to Alphabet's poor earnings and news that China and the European Union (EU) are preparing retaliatory measures targeting U.S. big tech companies in response to Trump's tariff threats. However, investor anxiety eased, and some tech stocks like Nvidia surged, closing the market on an upward trend.

Dan Loeb, CEO of Third Point, said, "Overall, a favorable environment for stock investment is expected to continue," but added, "This administration's atypical approach to creating and communicating policies that affect the market and economy can cause periodic disruptions."

The U.S. trade deficit for December last year, announced that morning, was $98.4 billion, the largest in two years and nine months. The deficit widened by 24.7% compared to the previous month ($78.9 billion) and significantly exceeded experts' expectations ($96.5 billion). It is analyzed that companies increased imports preemptively due to Trump's tariff threats, causing the trade deficit to surge. The strong dollar amid the U.S. economic boom also led consumers to increase consumption of relatively cheaper imported goods, expanding the trade deficit.

The increase in private employment greatly exceeded market expectations. According to the employment report released by ADP, a U.S. private labor market research firm, private sector nonfarm payrolls in the U.S. increased by 183,000 in January this year. This surpassed both December last year (176,000 increase) and market expectations (148,000). The number of job openings released the previous day unexpectedly decreased, signaling a slowdown in the labor market, resulting in mixed employment indicators.

Accordingly, investors are expected to gain a more accurate understanding of the U.S. employment market from the January employment report to be released by the Department of Labor on the 7th. Experts predict that nonfarm payrolls increased by 154,000 last month, a significant decrease compared to the previous month (256,000). The unemployment rate is expected to remain at 4.1%, the same as the previous month.

The dollar index, which indicates the value of the dollar against the currencies of six major countries, is trading at 107.46, down 0.34% from the previous day.

Bond yields are falling. The U.S. 10-year Treasury yield, a global bond yield benchmark, fell 8 basis points (1bp = 0.01 percentage points) from the previous trading day to 4.42%, while the U.S. 2-year Treasury yield, sensitive to monetary policy, is moving around 4.18%, down 2 basis points from the previous day.