[New York Stock Exchange] Anticipation for U.S.-China Summit and Tech Stock Rebound Drive Broad Gains... Oil Prices Surge Over 5%

Digesting Earnings Reports, Tech Stocks Lead Gains
M7 Results Seen as Key Factor for Future Rally
White House: "U.S.-China Summit on the 30th"
Will a Trade Agreement Be Reached?
U.S. Sanctions on Russia Send WTI and Brent Crude Up Over

On October 23 (local time), all three major U.S. stock indices closed higher. A rebound occurred just one day after the previous decline, as bargain hunting in technology stocks drove buying activity. Additionally, investor sentiment was boosted by the White House's official confirmation of the U.S.-China summit schedule for next week, raising hopes for an easing of trade tensions. International oil prices surged more than 5% following the U.S. announcement of sanctions against Russia the previous day.

A trader is working on the floor of the New York Stock Exchange (NYSE) in the United States. Photo by Reuters Yonhap News Agency

On this day at the New York Stock Exchange, the Dow Jones Industrial Average, which is focused on blue-chip stocks, closed at 46,734.61, up 144.2 points (0.31%) from the previous trading day. The S&P 500 Index, which tracks large-cap stocks, rose 39.04 points (0.58%) to 6,738.44, while the technology-heavy Nasdaq Index jumped 201.402 points (0.89%) to finish at 22,941.798.

Technology stocks showed particularly strong performance. Nvidia rose by 1.04%. Broadcom and Amazon each saw gains of 1.17% and 1.44%, respectively. Tesla, after posting disappointing third-quarter results the previous day and falling in the morning, rebounded to close up 2.28%. IBM, despite reporting results that exceeded Wall Street expectations, fell by 0.87% due to software sales falling short of forecasts.

Investors appeared to be digesting major corporate earnings reports and seeking opportunities for a rebound. According to financial information provider FactSet, 80% of S&P 500-listed companies that have reported earnings so far have surpassed market expectations. In particular, analysts noted that the performance of the so-called "Magnificent 7" large technology companies will likely determine the future direction of the stock market.

Expectations for an easing of U.S.-China trade tensions also drove the market higher. White House spokesperson Karoline Leavitt announced that U.S. President Donald Trump will visit South Korea on the 29th (Korean time) for a summit with President Lee Jaemyung, and then meet with Chinese President Xi Jinping on the 30th before returning to the United States the same day. Amid heightened U.S.-China tensions, optimism that the two leaders could reach a trade agreement in person helped ease market concerns.

The United States and China have recently heightened tensions by imposing export control measures on each other. After China restricted rare earth exports, the United States is considering imposing an additional 100% tariff on Chinese goods and software export restrictions starting next month. The previous day, U.S. Treasury Secretary Scott Besant stated, "Everything is on the table," adding, "Whether it's software, engines, or anything else, if export controls are implemented, we will coordinate with our G7 allies." However, he also left open the possibility of easing tensions, saying that trade negotiations with China are being conducted with "good intentions" and "great respect."

Giuseppe Sette, co-founder and president of Reflexivity, commented, "We should not underestimate the bull market because of volatility," adding, "While a handful of technology stocks have led the rally, we also need to watch how hundreds of global companies may benefit from productivity gains driven by artificial intelligence (AI)."

However, concerns are being raised that stock prices are overvalued. Chris Grisanti, Chief Market Strategist at MAI Capital Management, said, "This is a particularly stressful time in the market," noting, "Valuations are the second highest in 100 years. The market is strong and momentum is there, but valuations remain high." He also referenced the dot-com bubble around 2000, stating, "History may not repeat itself, but it often rhymes," and pointed out, "We are seeing meme stocks and companies pricing in forecasts for 2030 or even 2035. It's chilling to realize that similar things happened in 1998 and 1999."

The market is closely watching the Consumer Price Index (CPI) for September, which will be released on October 24. Experts expect last month's CPI to have risen 3.1% year-on-year, an increase from August's 2.9%. The Federal Reserve is expected to decide whether to cut interest rates at the upcoming Federal Open Market Committee (FOMC) meeting on October 28-29, based on this inflation data and labor market conditions. Last month, the Fed lowered its benchmark interest rate by 0.25 percentage points to a range of 4.0-4.25% per year.

International oil prices jumped more than 5% on news of U.S. sanctions against Russia. West Texas Intermediate (WTI) crude rose $3.29 (5.6%) from the previous session to $61.79 per barrel, while Brent crude, the global oil price benchmark, climbed $3.4 (5.4%) to close at $65.99 per barrel. This followed the Trump administration's sanctions on two major Russian oil companies for their lack of cooperation in ending the war in Ukraine.

International gold prices have been rising after halting a sharp decline on October 21. On this day at the New York Mercantile Exchange (COMEX), December gold futures were trading at $4,130.31 per ounce, up 1.6% from the previous session.

U.S. Treasury yields are also rising. The yield on the 10-year Treasury note rose 5 basis points (1bp = 0.01 percentage points) from the previous day to 4.0%, while the yield on the 2-year Treasury note increased 5 basis points to 3.49%.