[New York Stock Market Briefing] Major Indices Rebound with Tech Rally… Tesla Soars 8%

All three major indices of the U.S. New York Stock Exchange rebounded and closed strong. The tech rally, including a more than 8% jump in Tesla, led the market's rise.

On the 3rd (local time), the Dow Jones Industrial Average closed at 42,732.13, up 339.86 points (0.8%) from the previous session. The Standard & Poor's (S&P) 500 Index rose 73.92 points (1.26%) to 5,942.47, and the tech-heavy Nasdaq Composite Index surged 340.88 points (1.77%) to finish at 19,621.68.

Until the previous day, the S&P 500 and Nasdaq had been on a downward trend for five consecutive trading days, and the Dow for four. The strong buying sentiment amid the low prices, coupled with the improvement in U.S. manufacturing conditions to the highest level in six months, is seen as having improved investor sentiment.

The Institute for Supply Management (ISM) reported that the December Manufacturing Purchasing Managers' Index (PMI) was 49.3, exceeding market expectations (48.4). Although the index remains below 50, indicating a contraction in conditions, it showed an improving trend by hitting a six-month high.

The 'Magnificent 7', referring to seven giant tech companies, all rose except for Apple (-0.2%). Tesla surged 8.22%. After falling 6.1% to $379.28 on the first trading day of the new year, it recovered all losses in just one day. Nvidia also jumped 4.45%, maintaining its position as the second-largest by market capitalization.

U.S. Steel fell more than 6% after President Joe Biden blocked its acquisition by Nippon Steel. Microsoft (MS) announced it would spend $80 billion this year alone to build artificial intelligence (AI) data centers, boosting related stocks. Constellation Energy and Vistra closed up 4% and 8.5%, respectively.

All sectors showed strength on this day. Consumer discretionary surged more than 2%, while real estate, technology, utilities, and industrials rose more than 1%.

According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability that the Federal Reserve will hold the benchmark interest rate steady this month is reflected at 88.8%.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) fell 1.8 points (10.04%) to 16.13 from the previous session.

Reporter Goh Jeong-sam, Hankyung.com jsk@hankyung.com