New York Stock Market Dips Early... Watching FOMC Minutes Amid Caution

FOMC Minutes for January to Be Released
Background of Rate Hold and Tariff Impact Expected to Be Included
Electric Vehicle Maker Nikola Plunges 38% After Filing for Bankruptcy Protection

The three major indices of the U.S. New York Stock Exchange were down in early trading on the 19th (local time). Investors are cautious as they evaluate President Donald Trump's tariff policies and await the release of the Federal Reserve's (Fed) January Federal Open Market Committee (FOMC) minutes scheduled for the afternoon.

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As of 10:31 a.m. in the New York stock market, the blue-chip-focused Dow Jones Industrial Average (Dow) was down 0.27% from the previous day at 44,436.77. The large-cap-focused S&P 500 index was down 0.14% at 6,120.94, and the tech-heavy Nasdaq index was trading down 0.29% at 19,984.06.

President Trump announced the previous day that tariffs of about 25% would be imposed on automobiles, and tariffs exceeding 25% on semiconductors and pharmaceuticals. He stated that the official announcement date for this tariff policy would be April 2. However, before the new tariff announcement, he mentioned, "If they come to the U.S. and build factories, there will be no tariffs, so we want to give them a bit of a chance," leaving open the possibility of negotiations with major governments and companies.

Craig Johnson, Chief Market Technician at Piper Sandler, said, "The resilience of the stock market this year has been impressive as investors faced negative sentiment and concerns about tariffs and inflation but refused to retreat," adding, "As investors rotate out of weakness amid falling Treasury yields, weaker oil prices, and a declining U.S. dollar, market volatility is expected to continue."

The market is focusing on the January FOMC minutes to be released at 2 p.m. Eastern Time. The Fed began cutting interest rates in September last year, lowering rates by a total of 1 percentage point over three cuts, then held rates steady last month at 4.25-4.5%. Since then, Fed Chair Jerome Powell has repeatedly stated he will not rush rate cuts. Investors expect to hear Fed officials' views on the reasons for holding rates steady, the impact of President Trump's tariff policies on inflation, and the future path of interest rates through the FOMC minutes.

Scheduled public remarks by Fed officials this week are also expected to provide hints about the future interest rate path. On this day, Fed Vice Chair Philip Jefferson is scheduled to speak publicly, and on the 20th, Chicago Fed President Austan Goolsbee and Fed Governor Adriana Kugler are scheduled to give speeches.

The previous day, Mary Daly, President of the San Francisco Fed, stated, "At this point, policy should remain restrictive until progress on inflation is confirmed." Warnings about a potential AI stock bubble were also issued. Michael Barr, Fed Vice Chair for Supervision, said the day before, "If reality does not meet expectations, market adjustments could be triggered for companies that have made large investments in this technology," adding, "The U.S. economy experienced a productivity boom during the late 1990s dot-com boom, but it was followed by bankruptcies, capital overhang, and a cautious corporate investment environment."

Key economic indicators released last week were mixed. The January Consumer Price Index (CPI) rose 3% year-over-year, exceeding both the previous month and market expectations (both 2.9%). Housing costs, food, and energy prices all increased. However, January retail sales fell 0.9% month-over-month, a much larger decline than the previous month (0.7%) and the forecast (0.2% decrease).

U.S. Treasury yields were steady. The 10-year U.S. Treasury yield, a global bond yield benchmark, remained at 4.54%, the same as the previous trading day, while the 2-year Treasury yield, sensitive to monetary policy, hovered around 4.28%.

By stock, electric truck manufacturer Nikola plunged 38.11% after filing for bankruptcy protection due to financial difficulties. Intel, which is rumored to be split and sold to TSMC and Broadcom, fell 5.13% following a 16.06% surge the previous day. Tesla rose 2.42%.