[New York Stock Market] Mixed Close Amid Corporate Earnings Digest... Focus on July 7 Employment Report

Qualcomm Drops 3.7%, Ford Falls 7.5%
Amazon Beats Earnings Expectations... Down 2.1% After Hours
Yellen: "Strong Dollar Policy Continues... Will Lower 10-Year Yield"
Focus on Department of Labor Employment Report on the 7th

The three major indices of the U.S. New York Stock Exchange closed mixed on the 6th (local time). As concerns over President Donald Trump's tariff policy somewhat eased, investors digested individual corporate earnings, leaving the market without a clear direction.

EPA Yonhap News

On that day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average (Dow) closed at 44,747.63, down 125.65 points (0.28%) from the previous trading day. The large-cap-focused S&P 500 index rose for the third consecutive day, gaining 22.09 points (0.36%) to close at 6,083.57. The tech-heavy Nasdaq index ended the day at 19,791.99, up 99.66 points (0.51%).

By individual stocks, semiconductor company Qualcomm fell 3.72%. Despite reporting better-than-expected Q4 earnings the previous day, the announcement that there would be no growth in licensing revenue this year triggered selling pressure. Arm also dropped 3.34% due to profit-taking despite exceeding expectations. U.S. automaker Ford plunged 7.49% after issuing a difficult earnings outlook for this year. Tobacco company Philip Morris surged 10.95% on earnings that beat expectations. Amazon, which reported earnings after the market close, rose 1.13% during regular trading. Amazon announced Q4 revenue of $187.79 billion and earnings per share (EPS) of $1.86. These figures surpassed market research firm LSEG’s estimates ($187.3 billion and $1.49, respectively), but its future earnings outlook fell short of expectations, causing a 2.11% decline in after-hours trading as of 4:43 p.m. Eastern Time.

Zachary Hill, Chief Portfolio Manager at Horizon Investments, said, "Today's price movements definitely felt unusual," adding, "This is commonly seen during earnings season when investors focus on the fundamentals of individual companies."

Gaurav Malik, Chief Investment Officer (CIO) at Pallas Capital Advisors, commented, "Stock valuations are high, and many of the largest and most important companies in the market are reporting mixed earnings," forecasting that "it will be difficult for the stock market to sustain a strong upward trend this year."

The market appears to have shaken off concerns about President Trump's 'tariff bomb.' Earlier, President Trump signed an executive order on the 1st imposing a 25% tariff on all imports from Canada and Mexico and an additional 10% tariff on all Chinese imports on top of existing tariffs, citing failures to stop illegal immigration and drugs entering the U.S. from these countries. While tariffs on Canada and Mexico were abruptly postponed for a month just before they were to take effect on the 4th, the tariff increase on China was implemented at midnight on the 4th. However, investors view the tariff card as a 'negotiation tool' and expect the U.S. and China leaders to eventually reach an agreement.

In the afternoon, an interview with U.S. Treasury Secretary Janet Yellen was released by Bloomberg News. She stated that the 'strong dollar' policy continues under the second Trump administration. Regarding Jerome Powell, Chair of the U.S. Federal Reserve (Fed), she expressed trust, saying he "will do the right thing." While avoiding comments on monetary policy, she said policies would be implemented to lower the yield on the 10-year U.S. Treasury note.

Earlier in the day, employment data indicating a slowdown in the labor market was released. According to the U.S. Department of Labor, initial jobless claims for the week of January 26 to February 1 totaled 219,000, an increase of 11,000 from the revised previous week’s figure of 208,000. This was 5,000 higher than the expert forecast of 214,000. Continuing claims for unemployment benefits, which count those claiming benefits for at least two weeks, were 1,886,000 for the week of January 19 to 25, up 36,000 from the revised previous week’s 1,850,000 and 16,000 above market expectations of 1,870,000.

With mixed employment data this week, investors are focusing on the January employment report to be released by the Department of Labor on the 7th. The employment report is considered the most accurate indicator of the labor market’s current status. Experts expect nonfarm payrolls to have increased by 154,000 last month, a significant decrease from the previous month’s 256,000. The unemployment rate is forecast to remain steady at 4.1%.

Bond yields have risen slightly despite Secretary Yellen’s remarks. The U.S. 10-year Treasury yield, a global benchmark for bond yields, rose 1 basis point (1 bp = 0.01 percentage points) to 4.43%, while the 2-year Treasury yield, sensitive to monetary policy, increased 2 basis points to 4.21%.

International oil prices closed lower as President Trump reiterated his commitment to expanding oil production. West Texas Intermediate (WTI) crude fell $0.42 (0.6%) to $70.61 per barrel, and Brent crude, the global benchmark, dropped $0.32 (0.4%) to $74.29 per barrel.