Mixed Trends Amid CPI Caution… ‘China Export Resumes’ NVIDIA Up 4% [New York Stock Market Briefing]

Korea Economic Daily

Summary

It was reported that the New York market showed mixed trends due to the expanded increase in the June CPI and the effects of tariffs.
It was noted that news of the U.S. government’s approval for NVIDIA’s H20 chip exports to China boosted NVIDIA and other semiconductor-related stocks.
After the CPI release, expectations for a rate hold strengthened, and non-tech and financial stocks continued to weaken.

NASDAQ Hits Record High

The main indices of the New York stock market moved in mixed directions. With inflation rising, investor caution grew, while U.S. government approval of NVIDIA’s exports to China boosted tech stocks.

On the 15th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 44,023.29, down by 436.36 points (0.98%) compared to the previous day. The S&P 500 index fell 24.80 points (0.4%) to 6,243.76. Meanwhile, the tech-heavy NASDAQ gained 37.47 points (0.18%) to finish at 20,677.8, reaching an all-time high.

On this day, the Consumer Price Index (CPI) for June was released. June’s CPI rose by 0.3% compared to the previous month, a larger increase than May’s 0.1%. Year-on-year, it climbed 2.7%, higher than May’s 2.4% and slightly exceeding expert forecasts (2.6%).

Excluding food and energy, core CPI rose 2.9% year-on-year and 0.2% month-on-month. Although this was slightly below expectations, the month-on-month increase was larger. As tariffs began to impact prices, the market reacted sensitively.

After the CPI release, all of the Dow’s 30 components except for tech stocks fell. As tariff effects became clear, overall market sentiment turned more cautious.

NVIDIA jumped 4%. Its market capitalization surpassed ₩4,165,000,000,000. This was due to the U.S. government lifting export restrictions on NVIDIA’s H20 chip to China. Jensen Huang, NVIDIA’s CEO, said in an interview with China Central Television (CCTV), “The U.S. government has approved our (H20) exports so we can now ship them,” adding, “H20 will now be sold in the Chinese market.”

News of resumed AI chip exports to China drove up shares of the world’s largest foundry Taiwan TSMC and U.S. semiconductor company Broadcom by 3.59% and 1.94%, respectively. The Philadelphia Semiconductor Index, comprised of semiconductor-related stocks, also gained 1.27%.

Non-tech stocks were weak. U.S. pharma giant Eli Lilly & Company fell 3.45% and home improvement retailer The Home Depot dropped 3.1%. Major retail chains like Walmart and Costco also declined. Most financial stocks fell as well. Wells Fargo dropped over 5% despite strong second-quarter results, after lowering its net interest income guidance. JPMorgan Chase also showed weakness despite solid earnings. BlackRock fell more than 5% after quarterly revenue missed expectations.

According to CME FedWatch Tool at the Chicago Mercantile Exchange, the federal funds futures market lowered the probability of a 25bp (1bp=0.01%) rate cut in September to 54.4%. Conversely, the probability of a rate hold increased from 37.4% to 44.1%. The CPI impact boosted market expectations for a rate hold in September.

Jin Young-gi, Hankyung.com reporter young71@hankyung.com