Editor's PiCK
Cautious stance ahead of FOMC results... Three major indices close slightly lower [New York Market Briefing]
Summary
- The New York market reported that, a day ahead of the FOMC meeting results, the three major indices closed slightly lower amid a cautious stance.
- The market expects a 0.25 percentage point cut at this meeting, but is focusing on whether the rate-cutting bias will persist going forward.
- U.S. August retail sales came in stronger than expected, drawing investor attention to the possibility that the Fed may not rush to cut rates.
Major U.S. stock indices closed slightly lower. Investors remained cautious a day ahead of the U.S. central bank's (Fed) September Federal Open Market Committee (FOMC) regular meeting results.
On the 16th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 45,757.90, down 125.55 points (0.27%) from the previous day; the Standard & Poor's (S&P) 500 closed at 6,606.76, down 8.52 points (0.13%); and the Nasdaq Composite closed at 22,333.96, down 14.79 points (0.07%).
Although the indices closed lower, during the session the S&P 500 and the Nasdaq recorded new highs.
The U.S. Fed is widely expected to cut the policy rate by 0.25 percentage point at this FOMC meeting. Market attention is on whether the rate-cutting momentum will continue thereafter. In particular, the Fed's dot plot, which shows officials' projections for the policy rate, will be released at this FOMC meeting.
According to the Chicago Mercantile Exchange (CME) FedWatch tool, the federal funds futures market is pricing a 69.9% chance of a cumulative 75 bp rate cut by December.
The economic data released that day did not support a Fed rate cut.
U.S. August retail sales came in stronger than expected. If the economy is solid, the Fed is less likely to push for a rate cut. According to the U.S. Commerce Department, U.S. retail and food services sales in August were $732 billion, a seasonally adjusted increase of 0.6% from the previous month. The market had expected a 0.2% increase.
By sector, utilities fell 1.8% while energy rose 1.73%.
Looking at major stocks, NVIDIA, Microsoft and Broadcom fell more than 1%, while Amazon and Meta rose more than 1%.
Tesla gained 2.82% on the day, aided by a $1 billion share buyback by founder Elon Musk.
Oracle rose 1.49% amid speculation it could be a potential acquirer of TikTok's U.S. business.
The Cboe Volatility Index (VIX) rose 0.67 points (4.27%) to 16.36.
Han Kyung-woo Hankyung.com reporter 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.
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