Mixed finish in the first trading day of the new year…Tech stocks' mixed fortunes [New York market briefing]

The three major New York stock market indexes showed mixed results on the first trading day of the new year. Volatility increased as fortunes diverged within technology stocks.

On the 2nd (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average recorded 48,382.39, up 319.10 points (0.66%) from the previous trading day. The S&P 500 index rose 12.97 points (0.19%) to 6858.47, while the Nasdaq Composite closed down 6.36 points (0.03%) at 23,235.63.

Markets swung from the very first day of the new year. After four consecutive trading days of weakness, the indexes started strong for the first time in five sessions as early buying of dips flowed in, but selling then poured in as highs weighed on sentiment.

However, in the afternoon buying favored traditional industrials and value stocks, widening the Dow's gains, and the S&P 500 also finished slightly higher. The Nasdaq closed slightly lower.

By sector, moves within the technology sector varied.

Among the Dow Jones sector indexes, the software index (DJ US Software) plunged 2.69% that day, the largest decline among all sector indexes. By contrast, the semiconductors index (DJ US Semiconductors) surged 2.16%, the biggest gain among technology subindexes. The Philadelphia Semiconductor Index, composed of AI and semiconductor-related stocks, also rocketed 4.01%.

Specifically, energy jumped more than 2% and industrials rose 1.88%. Materials and utilities were also up in the 1% range. By contrast, consumer discretionary fell 1.14%.

Major software companies' shares generally fell. Microsoft dropped 2.21% and Palantir fell 5.56%. Salesforce (-4.26%), AppLovin (-8.24%), and Intuit (-4.98%) also participated in the declines.

On the other hand, of the 30 stocks that make up the Philly index, 29 caught fire, excluding Credo Technology. Micron Technology surged 10.51%, while ASML and Lam Research rose in the 8% range. Intel and TSMC also posted gains around 5%. Amid strength in traditional industrials, Boeing climbed 4.91% and Caterpillar rose 4.46%. All were interpreted as reflecting optimism about U.S. manufacturing.

Jose Torres, chief economist at Interactive Brokers, said, "The swings on the first trading day of the year seem symbolic of what may happen on Wall Street this year," adding, "Investors are weighing whether the tech sector still has the fuel to deliver excellent returns this year or whether the enthusiasm for artificial intelligence (AI) is overblown."

According to the CME FedWatch tool, the federal funds futures market priced in an 82.8% probability of a rate hold in January. It was 84.5% near the previous session's close. The CBOE Volatility Index (VIX) pointed to 14.51, down 0.44 points (2.94%) from the previous session.

Song-ryeol Lee, Hankyung.com reporter yisr0203@hankyung.com