Editor's PiCK
[New York Stock Market Briefing] As Microsoft surpasses ₩4 trillion in market cap, profit-taking sends market lower at the close
Summary
- Microsoft (MS) reported that after surpassing ₩4 trillion in market cap, profit-taking emerged, giving back about half of its earlier gains.
- Meta Platforms' earnings surprise and increase in capital expenditure outlook fueled buying, but the semiconductor sector plunged more than 3% due to weak results.
- It was reported that the rise in core PCE price index in the U.S., President Trump's pressure for drug price cuts, and unstable economic indicators weakened investor sentiment.
Major indexes closed lower on the New York Stock Exchange. Microsoft (MS) and Meta Platforms (formerly Facebook) started strong after reporting impressive earnings, but economic data uncertainties and drug price reduction pressure from U.S. President Donald Trump increased risk aversion sentiment.
On the 31st (local time) at the New York Stock Exchange (NYSE), by market close, the Dow Jones Industrial Average had fallen by 330.30 points (0.74%) to 44,130.98, the S&P500 had dropped by 23.51 points (0.37%) to 6,339.39, and the NASDAQ Composite Index had decreased by 7.23 points (0.03%) to 21,122.45.
MS and Meta, leading AI industry stocks, soared on robust earnings, which led to a wave of profit-taking.
MS increased its intraday gain up to 8.22%, with its market cap surpassing ₩4 trillion, becoming only the second in history to do so after NVIDIA. However, after surpassing the ₩4 trillion mark, extensive profit-taking erased about half the gains, and the stock ended up 3.93% higher.
Meta surged 11.25%. Similarly, after recording an 'earnings surprise' for the second quarter and raising its annual capital expenditure forecast, buying sentiment was stimulated.
Meta’s sharp rise weighed on semiconductor sector stocks, as major players posted weak earnings. The Philadelphia Semiconductor Index plunged more than 3% on the day.
By stock, Arm plummeted 13.44%. The market had expected a 'surprise result', but both Q2 earnings and future guidance came in line with market expectations, prompting disappointment-driven selling.
As Arm plunged, AMD and ASML also ended lower.
The pharmaceutical sector was also sluggish. President Trump sent letters to 17 global pharma giants, including Eli Lilly, demanding drug price reductions, undermining investor sentiment. The health care sector index fell 2.79%.
After closing, among Big Tech, Apple and Amazon reported their Q2 earnings.
Apple announced that second-quarter revenue rose 10% year-over-year to $94.04 billion, and earnings per share (EPS) increased by 12% to $1.57. Both exceeded market expectations compiled by LSEG.
Amazon also beat market expectations, posting Q2 revenues of $167.7 billion and EPS of $1.68.
The economic data also failed to support investor sentiment.
According to the U.S. Department of Commerce, the core PCE price index, excluding volatile food and energy, rose 0.3% in June from the previous month, up from a 0.2% increase in May. The all-items PCE price index, including food and energy, also rose 0.3% month-over-month in June, higher than May’s 0.2% increase.
According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the federal funds futures market reflected a 39% probability of a 25bp rate cut in September. The previous day, it was 46.7% by the close.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) rose 1.24 points (8.01%) to 16.72.
Reporter Hankyu Han, hankyung.com case@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.
