[New York Stock Market Briefing] Mixed Close Amid Economic Uncertainty and Corporate Negatives, Buoyed by Liquidity Supply Expectations

Major indices in the New York stock market closed mixed. This was due to the release of economic indicators fueling worries over the economy, alongside issues suggesting expectations for further liquidity expansion.

On the 7th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average ended at 43,968.64, down 224.48 points (0.51%) from the previous session, the S&P 500 closed at 6,340.00, falling 5.06 points (0.08%), and the NASDAQ Composite Index finished at 21,242.70, up 73.27 points (0.35%).

Movements in stock indices were sluggish throughout the day. While share prices rebounded in the short term, negative developments for individual companies triggered profit-taking.

Eli Lilly and Company, in particular, announced Q2 results that exceeded market expectations, but its share price plunged over 14%. This was due to oral obesity drug clinical trial results failing to meet expectations.

Salesforce dropped more than 3% following Google's announcement that their customer database had been stolen.

Concerns about the economy also intensified. A consumer expectations survey published by the Federal Reserve Bank of New York showed a renewed rise in expected inflation, highlighting ongoing uncertainty. The New York Fed also revealed that total household debt reached an all-time high, with clear upward trends in delinquencies on credit cards and auto loans. Sang-Young Seo, a researcher at Mirae Asset Securities, interpreted this as "a reflection of the weakened financial position of vulnerable groups due to prolonged high interest rates."

However, late in the session, the mood shifted on news that U.S. President Donald Trump had nominated Steve Miron, Chair of the White House Council of Economic Advisers, as the successor to Adriana Kugler, a member of the Federal Reserve System Board of Governors. With strong bargain hunting, the NASDAQ turned upward. Since President Trump made the nomination, the market expects a more active approach toward rate cuts.

However, President Trump stated that Miron would complete the remainder of Board Member Kugler's term for now, implying a 'temporary' position. Trump also mentioned, "We will continue to seek a permanent replacement," leaving some uncertainty.

Additionally, President Trump, just before the session's end, signed an executive order instructing that U.S. employee retirement plans (401(k)) be allowed to invest in assets such as cryptocurrencies, real estate, and private equity funds. Researcher Seo commented, "Expectations for liquidity supply have been rekindled," and explained, "This could further strengthen the demand for high-risk assets."

By sector, finance and healthcare both fell by more than 1%, while utilities rose by more than 1%.

The Philadelphia Semiconductor Index rose 1.50%. Although President Trump announced that a 100% tariff would be imposed on semiconductor products, he clarified that companies manufacturing semiconductors in the U.S. would be exempt, leading to renewed investor sentiment. TSMC increased by over 4%, ASML by 3.21%, and AMD surged by 5.69%.

According to the CME FedWatch Tool at the Chicago Mercantile Exchange (CME), the federal funds rate futures market reflected a 53.2% probability of a 75bp rate cut by December. The probability of a 25bp cut at the September meeting was reflected at 93.1%.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) fell 0.20 points (1.19%) to 16.57.

Hankyung.com Reporter Han Kyung-woo, case@hankyung.com