Wall Street cheered Nvidia–Meta tie-up, but ‘flinched’ at rate-hike talk [New York market briefing]

Major U.S. stock indexes closed higher in New York. News that Nvidia and Meta Platforms would expand their partnership boosted sentiment, but stocks gave back a sizable portion of gains after reports said the possibility of further rate hikes was discussed at last month’s regular Federal Open Market Committee (FOMC) meeting of the U.S. central bank (Fed).

On the 18th (local time), at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 129.47 points (0.26%) from the previous session to 49,662.66, the Standard & Poor’s (S&P) 500 gained 38.09 points (0.56%) to 6,881.31, and the Nasdaq Composite climbed 175.25 points (0.78%) to 22,753.63.

Amid signs of bargain buying, news of deeper cooperation between Meta and Nvidia lifted investor sentiment. Meta is set to purchase millions of graphics processing units (GPUs) from Nvidia and to adopt Nvidia’s central processing unit (CPU), “Grace,” as a standalone chip for its data centers. Shares of Nvidia and Meta each rose around 1%.

Memory-chip maker Micron Technology jumped 5.3%, helped by a disclosure showing hedge funds actively bought Micron shares in the fourth quarter last year.

Sentiment cooled, however, after the minutes of the January FOMC meeting were released. Several participants said it could be appropriate to consider raising the target range for the federal funds rate if inflation remains above the goal. Even an indirect suggestion that policy rates could be increased heightened investor caution.

According to CME Group’s FedWatch Tool, the federal funds futures market priced in a 94.1% probability of rates being left unchanged in March.

Still, equities did not turn lower and held onto gains, as bargain hunting also flowed in after the Nasdaq had fallen for five straight weeks through last week. All sectors rose except defensives such as utilities, real estate and consumer staples; energy gained 2% and consumer discretionary rose 1%.

Credit-rating company Moody’s saw its shares jump 6.51% after fourth-quarter revenue and earnings per share (EPS) both beat expectations.

Sports and entertainment company Madison Square Garden Sports surged 16% after announcing a plan to separate the New York Knicks basketball team from its existing business.

U.S. durable goods orders fell month on month, though they were viewed as solid excluding aircraft. According to the U.S. Department of Commerce, durable goods orders in December declined 1.4% from the previous month, compared with a forecast drop of 2%. Non-defense capital goods orders excluding aircraft (core capital goods orders), seen as a gauge of corporate investment, increased 0.6% from the prior month.

The Cboe Volatility Index (VIX) fell 0.67 points (3.30%) from the previous session to 19.62.

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