[New York Market Briefing] "Is the bubble still there?" Rebound on perception of excessive sell-off…Micron up 9%

Major indices in New York rebounded. After a sharp decline on the 4th when concerns about a bubble in artificial intelligence (AI) investment were highlighted, bargain buying flowed in. However, selling pressure returned late in the session and erased some of the gains.

On the 5th (local time) at the New York Stock Exchange (NYSE), the Dow Jones 30 Industrial Average closed at 47,311.00, up 225.76 points (0.48%) from the previous day; the Standard & Poor's (S&P) 500 index closed at 6,796.29, up 24.74 points (0.37%); and the Nasdaq Composite Index finished at 23,499.80, up 151.16 points (0.65%).

The rebound in the semiconductor sector, which had fallen sharply the previous day, was notable. The Philadelphia Semiconductor Index jumped 3.02% that day. NVIDIA, TSMC and Arm fell, but all other constituent stocks rose. In particular, Micron Technology surged 8.93%. AMD rose 2.31%, and Qualcomm and Intel also showed gains in the 3% range.

This was due to AMD reporting strong results after the market close the previous day. AMD posted third-quarter revenue of $9.25 billion and net income of $1.2 billion. Revenue was a quarterly record.

Most giant tech companies with market capitalizations over $1 trillion also rose. Tesla jumped more than 4%, and Broadcom and Alphabet were up in the 2% range.

However, the fact that the stock indexes gave up about half of the day's gains in the last 15 minutes showed that high stock valuations and AI bubble concerns still weigh on investor sentiment.

The Nasdaq rose as much as 1.23% intraday before its gain narrowed to 0.64% ahead of the close.

As the U.S. federal government shutdown continues, official government statistics remain unavailable. The shutdown reached 36 days, marking the longest on record.

Private-sector economic indicators were strong.

The Institute for Supply Management (ISM) reported that the October services PMI was 52.4, up 2.4 points from September's 50.0.

According to ADP's national employment report, private payrolls rose by 42,000 in October from the previous month, surpassing the market expectation of a 25,000 increase.

According to the CME FedWatch Tool on the Chicago Mercantile Exchange (CME), futures on the federal funds rate showed a 37.4% chance that the policy rate will be held steady through December, up from 31.4% near the previous day's close.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) fell 0.99 points (5.21%) to 18.01.

Han Kyung-woo, Hankyung.com reporter case@hankyung.com