CPI rises below expectations despite distortion controversy…Micron 10%↑ [New York Stock Market Briefing]

Major indexes on the New York market rose. Despite controversy over distortion, the U.S. November Consumer Price Index (CPI) came in below expectations, and Micron surged on strong results.

On the 18th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 47,951.85, up 65.88 points (0.14%) from the previous day; the Standard & Poor's (S&P) 500 index closed at 6,774.76, up 53.33 points (0.79%); and the Nasdaq Composite closed at 23,006.36, up 313.04 points (1.38%).

Major stock indexes sharply rebounded as the November CPI rise came in below expectations, boosting hopes for a Federal Reserve (Fed) rate cut.

The U.S. Department of Labor said that, over the two months from September through November, the all-items CPI rose 0.2% on a seasonally adjusted basis. Because October inflation was not compiled due to a temporary federal government shutdown, the rise was reported as a two-month figure. Core CPI rose 0.2%. Year-on-year figures fell more sharply: November CPI was 2.7% year-on-year, and core CPI was 2.6%.

However, the CPI report caused volatility as controversy over distortion surfaced. The Nasdaq fell by as much as 1% point within 30 minutes during the session. In particular, controversy was ignited by the assumption that housing costs, which had been keeping inflation elevated, were 0%.

Because of the controversy, rate-cut expectations recorded by the Chicago Mercantile Exchange (CME) FedWatch tool did not move much. The probability of the policy rate remaining unchanged in January next year was reflected at 73.4%.

However, the U.S. 10-year Treasury yield fell 0.028% point from the previous day to 4.121%.

Among major sectors, artificial intelligence and semiconductor sectors surged, thanks to Micron Technology's strong results announced after the previous day's close. The Philadelphia Semiconductor Index jumped 2.6%. Micron Technology rose more than 10%.

Communication services, utilities, technology, and consumer discretionary also rose more than 1%.

Meanwhile, energy fell 1.42%.

All mega tech companies with market capitalizations over $1 trillion rose.

Tesla was up 3.45%, fueled by continued expectations for a SpaceX listing and an autonomous taxi service. NVIDIA, Microsoft, Alphabet, Broadcom, Amazon, and Meta also rose around 2%.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) was down 0.75 points (4.26%) from the previous session, at 16.87.

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