U.S. cautious mood ahead of FOMC…Intel down 7.45% ↓ [New York market briefing]

The three major U.S. stock indexes in New York showed mixed moves. The ranges of fluctuation were not large. Caution appeared to be growing ahead of next week’s Federal Open Market Committee (FOMC) meeting.

On the 4th (local time) at the New York Stock Exchange (NYSE), the Dow Jones 30 Industrial Average closed at 47,850.94, down 31.96 points (0.07%) from the previous session. The Standard & Poor's (S&P) 500 Index closed at 6,857.12, up 7.4 points (0.11%), and the Nasdaq closed at 23,505.14, up 51.04 points (0.22%).

No sector moved more than 1%. Industrials, financials, energy, communication services, and technology rose.

The U.S. federal government’s longest-ever shutdown (temporary work stoppage) left a gap in October employment data, directing more attention to indicators such as unemployment insurance. According to the U.S. Department of Labor, for the week ending on the 29th of last month, initial unemployment insurance claims were 191,000 on a seasonally adjusted basis. It was the lowest level since September 2022. Compared with the prior week, it decreased by 27,000 and was nearly 30,000 below market expectations.

The sharp drop in demand for unemployment insurance is interpreted as indicating that the labor market is recovering. That weakens the case for an interest rate cut by the U.S. central bank (Fed).

However, some in the market say this week’s weekly unemployment insurance claims data was distorted. They argue that Thanksgiving made it difficult for seasonal adjustment to be properly reflected. Citigroup said in an investment note published that "there is no need to overinterpret the decline in weekly unemployment insurance claims this week" and "we expect it to increase again in the coming weeks."

Despite the unemployment insurance results, the market’s outlook for the probability of a rate cut next month barely changed. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the federal funds futures market reflected an 87% probability of a 25 bp cut in December (1 bp = 0.01% point).

Looking at individual stocks, NVIDIA rose 2.16%, while Amazon and Apple fell more than 1%. Meta jumped 3.43% on news it would cut back its metaverse business; intraday gains reached as much as 5.71%.

Oracle rose 3.18% as Wall Street analyses suggested expected future revenue is not yet fully reflected in the stock price. Salesforce rose 3.62% on better-than-expected third-quarter results and a fourth-quarter sales outlook.

Intel plunged 7.45%. It appeared to be correcting after a short-term surge on hopes it could take over production of Apple’s 'M-series' chips starting next year. The Philadelphia Semiconductor Index fell 0.88%.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) was down 0.3 points (1.87%) from the previous close, at 15.78.

Jinyoung Ki, Hankyung.com reporter young71@hankyung.com