Mutual Tariff Exemption on Electronics Leads to Concurrent Strength...Apple's Market Cap Recovers to $3 Trillion [New York Stock Exchange Briefing]

The three major indices of the New York Stock Exchange closed with concurrent strength. As U.S. President Donald Trump decided to exempt mutual tariffs on major electronics with China, investor sentiment improved with expectations of benefits for tech stocks.

On the 14th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 40,524.79, up 312.08 points (0.78%) from the previous session. The Standard & Poor's (S&P) 500 index rose 42.61 points (0.79%) to 5,405.97, and the Nasdaq Composite Index finished at 16,831.48, up 107.03 points (0.64%).

The stock market cheered the mutual tariff exemption on major electronics. The U.S. Customs and Border Protection (CBP) announced over the weekend the 'Notice of Exclusion from Mutual Tariffs on Certain Goods.' This included items such as smartphones, laptop computers, computer processors, memory chips, and semiconductor manufacturing equipment, which are exempt from the mutual tariffs imposed by President Trump.

With expectations that big tech companies like Apple will avoid mutual tariffs with China, stock prices showed strength.

By sector, all sectors except discretionary consumer goods rose. Real estate increased by more than 2%, while utilities, materials, industrials, healthcare, finance, and essential consumer goods rose by about 1%.

The technology sector remained slightly positive, but Apple rose by 2.21%, reflecting expectations. Apple's market capitalization surpassed $3 trillion again. On the other hand, Meta fell by more than 2%, and Amazon showed a decline rate of about 1%.

Automotive stocks showed strength on news that President Trump is considering ways to help car companies. General Motors rose by 3.46%, and Ford increased by 4.07%.

Chinese internet companies' stocks were also strong. The CSI China Internet ETF rose by more than 4% on the day, continuing its upward trend for four consecutive trading days. This is interpreted as the impact of President Trump's decision to exempt mutual tariffs on major Chinese electronics.

Palantir rose by more than 4% on news that the North Atlantic Treaty Organization (NATO) built an artificial intelligence (AI) tactical system with the company's system.

Christopher Waller, a member of the U.S. Federal Reserve (Fed), predicted that even if President Trump's tariffs remain high, the impact on inflation will be temporary.

He said, "While inflation is expected to rise significantly, if expected inflation is well anchored, inflation will return to a more moderate level next year," and "If the slowdown is significant and even threatens a recession, the Federal Open Market Committee (FOMC) may prefer to lower rates faster and more significantly than previously thought."

The New York Federal Reserve's Consumer Expectations Survey (SCE) showed that one-year expected inflation was 3.6%. It jumped 0.5 percentage points from 3.1% the previous month, the highest level since October 2023.

According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of the Fed holding the base rate steady until the end of June rose to 24.3% by the end of the previous day. Meanwhile, the probability of a 0.5 percentage point cut fell slightly from 13.7% to 11.4%.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) recorded 30.89, down 6.67 points (17.76%) from the previous session.

Reporter Gojung Sam, Hankyung.com jsk@hankyung.com