[New York Stock Market Briefing] New York Stock Market Closes Higher Despite Concerns of Consumer Slowdown, Optimism Spreads

Korea Economic Daily

Summary

The New York Stock Market reported that the three major indices closed higher due to the spread of optimism from the US-China trade negotiations.
Despite the decline in the consumer sentiment index and the rise in expected inflation, it was reported that buying sentiment dominated the market.
All sectors except energy rose, with significant increases in the stocks of UnitedHealth Group and Charter Communications.

The three major indices of the New York Stock Exchange showed strong performance. Optimism spread due to the results of the US-China trade negotiations.

On the 16th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 331.99 points (0.78%) to record 42,654.74. The Standard & Poor's (S&P) 500 index rose 41.45 points (0.70%) to 5,958.38, and the Nasdaq Composite Index jumped 98.78 points (0.52%) to close at 19,211.10.

The S&P 500 index rose every trading day this week. Since the 2.51% surge on April 22, there have been only three trading days of decline until today. The sharp decline triggered by the conflict between the US and China turned into a surge as they agreed to defer tariffs.

Although the US consumer sentiment index fell in May and short-term expected inflation rose abnormally, it did not attract much attention from investors. According to the University of Michigan, the preliminary consumer sentiment index for May was 50.8. This is not only lower than the market expectation of 53.4 but also 1.4 points (p) lower than the confirmed figure of 52.2 in April.

The one-year expected inflation also jumped from 6.5% in April to 7.3%, the highest since 1981. Carly Cox, chief market strategist at Resolute Wealth Management, diagnosed, "The relief over the reduction of public tariffs dominated the market this week," and "Buying sentiment driven by investor psychology took precedence over economic indicators."

By sector, all sectors except energy rose. Consumer staples, healthcare, industrials, real estate, and utilities jumped more than 1%. UnitedHealth Group, the largest US insurer, which had been repeatedly plummeting this week, rebounded by 6.4%. Charter Communications, the second-largest cable company in the US, also announced a merger with the unlisted company Cox Communications, and its stock price rose by nearly 2%.

Five of the 'Magnificent 7 (M7)' leading tech stocks, which showed a decline the previous day, also rose. Tesla rose the most by 2.09%, and Google also jumped 1.36%. NVIDIA rose 0.42%, and Microsoft and Amazon rose 0.25% and 0.2%, respectively.

Se-Sung Oh, Hankyung.com reporter sesung@hankyung.com