Editor's PiCK
Three major indices hit record highs one day after rate cut…Intel surges 22% [New York market briefing]
Summary
- It reported that the U.S. Federal Reserve's rate cut and the expectation of additional cuts this year led the New York market's three major indices to all reach record highs.
- NVIDIA announced it would invest $5 billion in Intel, sending Intel shares up 22.77% and boosting semiconductor stocks.
- Some sectors, including electric vehicles, nuclear power, and quantum stocks, showed sharp rises and mixed performance, while international oil prices fell on concerns about an economic slowdown.
NVIDIA to invest $5 billion in Intel
The New York market closed at record highs across the board. This was attributed to the U.S. Federal Reserve (Fed) resuming rate cuts for the first time in nine months, and news that NVIDIA will invest $5 billion (about KRW 6.9425 trillion) in Intel.
On the 18th (local time) at the New York Stock Exchange, the Dow Jones Industrial Average closed at 46,142.42, up 124.10 points (0.27%) from the previous trading day. The S&P 500 rose 31.61 points (0.48%) to 6,631.96, and the tech-heavy Nasdaq Composite climbed 209.40 points (0.94%) to 22,470.73.
Thus, the three major indices all set record highs. Not only the three major indices but the small-cap Russell index also rose 2.39% to a record high.
The previous day, Jerome Powell, chair of the U.S. Fed, said, "This rate cut is insurance (against an economic downturn)," and U.S. markets had shown mixed results. However, that day the market interpreted the Fed's dot plot (rate forecast) as signaling two more rate cuts this year.
In addition, when NVIDIA said it would invest $5 billion in Intel, Intel jumped 22.77%. The two companies said they would jointly develop PC and data center chips through this collaboration. NVIDIA also closed up 3.56%. As a result, semiconductor stocks rallied across the board, and the semiconductor index rose 3.60%.
In electric vehicles, Tesla fell 1.64% while Rivian surged 4.04%, showing mixed performance. Quantum stocks rallied across the board, with Rigetti soaring 13.03%. Expectation of a growing future nuclear market pushed U.S. nuclear stock Oklo up 10.10%.
According to the CME FedWatch tool, the federal funds futures market currently reflects a 91.9% probability of a 25bp rate cut in October.
International crude oil prices fell for a second day amid concerns of an economic slowdown. At the New York Mercantile Exchange, October-delivery West Texas Intermediate (WTI) settled at $63.57 per barrel, down $0.48 (0.75%) from the previous trading day.
No Jeong-dong, Hankyung.com reporter dong2@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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