PiCK
[New York Stock Market Briefing] Major US indices fall simultaneously... Stagflation fears highlighted
Summary
- It was reported that the three major indices of the New York Stock Exchange fell simultaneously.
- It was stated that concerns about stagflation have weakened investor sentiment.
- It is analyzed that the downward revision of economic forecasts by the ECB and Fed has negatively impacted the stock market.
The three major indices of the New York Stock Exchange fell simultaneously. This is because the possibility of stagflation (rising prices amid economic recession) has emerged.
On the 20th (local time), the Dow Jones Industrial Average at the New York Stock Exchange (NYSE) closed at 41,953.32, down 11.31 points (0.03%) from the previous session. The Standard & Poor's (S&P) 500 index fell 12.4 points (0.22%) to 5,662.89, and the Nasdaq index closed at 17,691.63, down 59.16 points (0.33%).
Stagflation concerns weighed on investor sentiment. Christine Lagarde, President of the European Central Bank (ECB), stated at a parliamentary hearing in Brussels, Belgium, that if the United States imposes a 25% tariff on European Union (EU) goods, the Eurozone's growth rate could fall by 0.3 percentage points in the first year. She also warned that if the EU retaliates, the decline in growth could expand to 0.5 percentage points, and in the short term, European retaliation and a weaker euro could increase inflation by 0.5 percentage points.
Previously, the US Federal Reserve (Fed) also lowered its economic growth forecast and raised its inflation forecast in the Summary of Economic Projections (SEP). If this trend intensifies, it seems that the US, along with the Eurozone, will not be able to escape the fear of stagflation.
Sam Stovall, Chief Investment Strategist at CFRA Research, pointed out, "The US economy is not heading into a recession, but we still don't know exactly what will happen because of the tariffs."
US semiconductor company Microchip Technology announced a plan to issue convertible bonds worth $1.35 billion, after which its stock price fell by more than 6%. Multi-brand restaurant operator Darden Restaurants saw its stock rise by more than 5% after reporting earnings that exceeded expectations per share (EPS), despite sales falling short of market expectations.
IonQ also fell by more than 9%. Jensen Huang, CEO of Nvidia, also commented on the quantum computing industry, saying, "(After my past comments caused quantum computing company stocks to plummet) my first reaction was that I didn't know they had gone public (IPO)," and "How could quantum companies have gone public?"
Reporter Youngki Jin, Hankyung.com young71@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.
