[New York Market Briefing] Mixed Close as Shutdown Nears… Selling Tech Stocks, Rotation to Blue Chips

Korea Economic Daily

Summary

The New York market reported a rotation from tech stocks to blue chips as a U.S. federal shutdown looms.
Traditional industrial stocks and financial stocks were strong, while major tech stocks weakened amid valuation concerns.
International oil prices plunged after OPEC revised its outlook, which could affect energy-related investment.

Major New York stock indexes closed mixed. With the U.S. federal government's potential shutdown (temporary halt of operations) looming, there were signs of a rotation from tech stocks to blue-chip stocks.

On the 12th (U.S. local time) at the New York Stock Exchange, the Dow Jones Industrial Average closed at 48,254.82, up 326.86 points (0.68%) from the previous trading day. The Dow hit an all-time high.

The Standard & Poor's (S&P) 500 Index rose 4.31 points (0.06%) to 6,850.92, while the Nasdaq Composite fell 61.84 points (0.26%) to 23,406.46.

With a shutdown of the U.S. federal government looming, traditional industrial stocks showed strength. By sector, healthcare rose 1.36% and financials gained 0.9%. Within the financial sector, Goldman Sachs rose 3% and Morgan Stanley gained more than 2%. This is interpreted as reflecting expectations that, if a shutdown is resolved and economic data are released normally, the case for additional interest rate cuts would be highlighted again.

Tech stocks showed weakness amid valuation concerns. Apple (-0.65%), Amazon (-1.97%), Alphabet, Google's parent company (-1.58%), Meta (-2.88%), and Tesla (-2.05%) all declined.

However, AMD jumped 9.00% after announcing plans to improve earnings. Lisa Su, AMD's chief executive officer (CEO), said at an Analyst Day event held in New York that "artificial intelligence (AI) will drive most of the growth," and predicted that data center chip sales in the AI semiconductor market will increase to $1 trillion (about 1,400 trillion won) by 2030. She said AMD's central processing units (CPUs), networking chips, and specialized AI chips are included in this market.

Following AMD's surge, NVIDIA (0.33%) rose, and Microsoft (0.48%) and Broadcom (0.93%) also climbed.

International oil prices plunged after the Organization of the Petroleum Exporting Countries (OPEC) revised its outlook, forecasting a global oil supply surplus next year.

At the New York Mercantile Exchange that day, West Texas Intermediate (WTI) crude for December delivery closed at $58.49 a barrel, down $2.55 (4.18%) from the previous trading day. WTI's decline that day was the largest since last month on the 10th (-4.24%). The price also fell to its lowest level since $57.82 on the 21st of last month.

Noh Jeong-dong, Hankyung.com reporter dong2@hankyung.com