Summary
- The three major New York stock indexes ended mixed, with trading marked by sharp swings.
- Volatility increased as algorithmic trading and leveraged bets expanded despite a slowdown in the CPI.
- Markets are seeing continued selling of AI loser companies amid an AI-driven industrial upheaval, with concerns growing over volatility and potential credit issues.
The three major U.S. stock indexes on the New York Stock Exchange ended the session mixed.
Investor sentiment was weighed down by fears that artificial intelligence (AI) could hit industries across the board, though bargain hunting appears to have been triggered, driving sharp swings.
On the 13th at the NYSE, the Dow Jones Industrial Average rose 48.95 points (0.10%) from the previous session to close at 49,500.93. The Standard & Poor’s S&P 500 gained 3.41 points (0.05%) to 6,836.17, while the Nasdaq Composite fell 50.48 points (0.22%) to 22,546.67.
According to the U.S. Department of Labor, the headline Consumer Price Index (CPI) for January rose 0.2% month on month on a seasonally adjusted basis. That was slower than December’s 0.3% increase and also below the market forecast of a 0.3% rise. However, the core CPI in January also rose 0.3% month on month, matching expectations.
Still, the CPI report failed to extend gains. Stock-index futures, which had added to advances after the release, soon gave back gains as investors gauged shifts in sentiment.
After the open, equity benchmarks swung violently. The S&P 500 plunged as much as 50 points within 10 minutes of the opening bell, only to recover 50 points again in just four minutes. As algorithmic trading and leveraged bets take up a larger share, dizzying volatility is becoming more frequent.
Keith Buchanan, senior portfolio manager at Globalt Investments, said, “Today’s CPI report did nothing at a time when it’s unclear how far the AI-driven industrial upheaval will go,” adding, “The market is still trying to figure out what impact AI will have across the economy.”
Emmanuel Cau, an analyst at Barclays, said, “Investors are mercilessly selling companies that are AI losers,” adding, “The list of these companies is growing every day, deepening the divide between the new and old economy sectors and between the U.S. and other parts of the economy.”
He added that “even amid concerns that volatile stock moves and the AI-triggered upheaval could spill over into broader macroeconomic and credit problems, growth, rates and corporate earnings remain at healthy levels.”
Kim So-yeon, Hankyung.com reporter sue123@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
