Markets drop on caution ahead of July CPI release…Micron surges over 4% [New York Stock Briefing]

Korea Economic Daily

Summary

Major indexes ended lower ahead of the U.S. July Consumer Price Index (CPI) release.
Depending on the July CPI inflation rate, debates over a benchmark rate cut at the September Federal Open Market Committee (FOMC) are expected to intensify.
Micron Technology surged over 4%% on raised earnings guidance, while C3.ai plunged due to weak Q2 performance.

*On the 5th (local time) at the New York Stock Exchange, Gary Gensler, SEC Chairman, hosts a broadcast before the ceremonial ‘opening bell’ is rung./New York=Kim Beom-jun*

Major indexes on the New York Stock Exchange ended lower due to caution over the U.S. July Consumer Price Index (CPI) release.

On the 11th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 43,975.09, down 200.52 points (0.45%) from the previous day; the S&P 500 Index dropped 16.00 points (0.25%) to 6,373.45, and the NASDAQ Composite Index fell 64.62 points (0.30%) to 21,385.40.

Ahead of the July CPI announcement the next day, investors adopted a wait-and-see approach, anticipating a possible pick-up in the inflation rate compared to June. Especially for the core CPI, which excludes volatile food and energy prices, July estimates show a 0.3% increase from the previous month and a 3% year-on-year rise.

The July CPI is the last to be released ahead of the Jackson Hole meeting on the 16th. The Jackson Hole meeting brings together major central bank governors; if the July CPI surges, the debate over a benchmark rate cut at the Federal Open Market Committee (FOMC) in September will likely intensify.

U.S. President Donald Trump’s remarks downplaying the significance of an upcoming summit with Russian President Vladimir Putin as ‘exploratory’ also dampened investor sentiment. The two leaders are set to meet on the 15th in the State of Alaska. President Trump commented, "This meeting is somewhat exploratory," signaling there remains a long way to a ceasefire in the Russia–Ukraine war.

By stock, Micron Technology gained over 4% on the back of its raised Q3 earnings guidance.

Bitcoin prices broke through $120,000, keeping bullish strategies in play.

In contrast, AI company C3.ai plunged over 25% as Q2 earnings fell sharply year-on-year.

By sector, all except discretionary consumer, staples, and healthcare finished weak.

According to the FedWatch Tool at the Chicago Mercantile Exchange (CME), the federal funds futures market is pricing in an 86.5% probability of a 25bp rate cut by September. The probability of a 75bp cut by December fell slightly to 43.9%.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) rose 1.10 points (7.26%) to 16.25.

Hankyung.com reporter Han Kyungwoo case@hankyung.com