Mixed Close Amid Consumption Slowdown Concerns… Amazon and Meta Rise Over 2% [New York Stock Market Briefing]

The New York stock market closed mixed for the third day. Despite easing US-China trade tensions and a slowdown in US economic indicators for April, the market continued its recent bullish trend without being significantly affected by these results.

On the 15th (local time) at the New York Stock Exchange, the Dow Jones Industrial Average closed at 42,322.75, up 271.69 points (0.65%) from the previous session. The S&P 500 index rose 24.35 points (0.41%) to 5,916.93, while the tech-heavy Nasdaq Composite Index fell 34.49 points (0.18%) to 19,112.32.

According to the US Department of Commerce, US retail sales last month increased by 0.1% month-on-month on a seasonally adjusted basis, totaling $724.1 billion. The March growth rate was revised up from 1.5% to 1.7%.

The April consumption indicators slightly exceeded market expectations but showed a significant slowdown compared to the previous month, sparking concerns about a consumption slowdown.

Eugenio Aleman, chief economist at Raymond James, analyzed, "This report shows that consumers are becoming more selective and are carefully choosing what to consume and where to cut spending."

The Producer Price Index (PPI) for April fell sharply to its lowest level in five years. According to the Labor Department, the April PPI fell 0.5% month-on-month on a seasonally adjusted basis, significantly below market expectations and marking the largest drop since April 2020.

However, the market seemed to place more weight on the optimism formed by the US-China trade negotiations than on the consumption slowdown and the sharp drop in wholesale prices. The Nasdaq took a breather without reacting much to the economic indicators, while the Dow rebounded after two days of adjustment.

Joe Cusick, senior vice president at Calamos Investments, said, "As recession fears subside and the market builds a solid foundation, the market has shifted to cautious optimism," adding, "However, investors must navigate various macroeconomic and microeconomic risk factors."

By sector, all sectors except discretionary, technology, and communication services were strong. Utilities and consumer staples rose more than 2%, while real estate, materials, business, and healthcare rose more than 1%.

The 'Magnificent 7', referring to seven giant tech companies, showed mixed results. Amazon and Meta fell more than 2%. Tesla fell 1.4%. Meta's investment sentiment deteriorated on news of delaying the launch of new artificial intelligence (AI) services.

Walmart, a major retail chain, recorded a slight decline despite announcing better-than-expected first-quarter results, as management warned of price increases due to high tariffs.

Foot Locker soared 85% on news that Dick's Sporting Goods agreed to acquire it for $2.4 billion.

Coinbase plunged 7.2% following the revelation that hackers bribed Coinbase employees to steal customer data for social engineering attacks.

The number of new unemployment claims in the US remained at the same level as the previous week. According to the Labor Department, the number of new unemployment claims was 229,000 on a seasonally adjusted basis, matching the previous week's figure and market expectations.

Federal Reserve Chairman Jerome Powell delivered a speech but did not mention the interest rate path, having little impact on the market.

Powell said, "We may be entering a period of more frequent and potentially more persistent supply shocks," adding, "This will be a challenging test for both the economy and the central bank."

According to the Chicago Mercantile Exchange (CME) FedWatch tool, the probability of the Fed holding the benchmark interest rate steady in June was reflected at 91.8%, the same level as at the close of the previous day.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) recorded 17.83, down 0.79 points (4.24%) from the previous session.

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