New York Stock Exchange Closes Mixed on Triple⁢ Witching⁢ Day

Major indices on the New York Stock Exchange ⁤closed mixed on the 20th (local time), a day known as the “triple witching day” when stock index futures,⁤ stock ⁤index‍ options, and⁢ individual stock options all​ expired at the same time.

The Dow Jones Industrial Average rose 38.17 points (0.09%) from the previous day to close at 42,063.36,⁢ renewing its previous record high. The Standard & Poor’s (S&P) 500 index, which focuses on large-cap stocks, fell 11.09 points (0.19%) ⁣to 5,702.55, and the Nasdaq Composite Index, which⁤ focuses⁣ on technology stocks, fell 65.66 points (0.36%) to 17,948.32.

For the ⁢week, the Dow rose 1.6%, while the S&P 500​ and Nasdaq rose 1.4% and 1.5%, respectively.

The three major indexes, which had their best performance in over a month‍ the day before, showed a somewhat weak performance at the beginning of the session⁤ as volatility⁤ increased on​ the “Three Witches Day.”

However, ⁢Federal Reserve Governor Christopher Waller, who spoke publicly that day, improved‌ the market sentiment by reinforcing⁣ expectations for an additional ⁤”big cut” in November. In an interview with CNBC, Governor⁢ Waller mentioned the possibility that the ⁤core personal consumption‍ expenditures (PCE) price index in August⁢ could fall below the‌ Fed’s 2% target and expressed his intention to support more aggressive rate cuts if the indicator continues to weaken.

After⁢ his remarks, the⁤ market’s expectations for a 0.50% point (%P) rate cut have strengthened. According to the Chicago Mercantile Exchange (CME) Group FedWatch at the​ end of the session, ​interest rate futures market participants⁣ are reflecting a 52.4% chance that the Fed will⁤ cut the benchmark interest rate by 0.50%P in November, which is higher than the 47.6% chance that it will cut by 0.25%P.

However, Federal Reserve Governor Michelle Bowman, who opposed the ‘big cut’ at the last meeting, issued a statement that day explaining ⁤that she advocated a⁤ 0.25%P rate cut ⁢because inflation​ was still exceeding the target.

Market participants‍ are focusing on the August PCE price index, which will be released on the 27th. If‌ the headline figure‍ confirms‍ that the ​core⁢ PCE ⁢price index, excluding volatile food and energy items, ⁣rose ⁢less than 2% year-on-year, ⁢bets that the ​Fed will make another ‘big cut’ in November are likely ​to increase.

Some in the market are concerned ​that⁤ the Fed, which made the “big cut,” is the only one seeing risks that the market cannot see. “The ‘big cut’ makes people think⁢ about the risks that are under the surface‍ that they don’t know about and build positions ‍that take into account​ those uncertain risks,” said Michael Matosek, head trader at US Global Investors.

The latest quarterly earnings of logistics company FedEx, released the day before, added⁣ to these ​concerns. ⁢FedEx announced adjusted earnings per share of​ $3.60 and revenue of $21.6 billion for​ the first‌ quarter of ‌its fiscal ‍year. This is a weaker figure ​than a year ago and also missed Wall Street expectations. Earnings guidance was also revised downward from the previous one. Slowing performance of logistics ‍companies like FedEx is interpreted as a possible slowdown⁣ in economic activity, which is interpreted as more​ than the performance of‍ individual companies. FedEx closed down 15.24% that day.

“Investors⁣ viewed the ‌aggressive rate cut as a​ positive catalyst,” said Mark Hackett, head ‍of investment research at Nationwide. “The⁢ Fed was able to effectively convince investors that⁢ this large rate cut was a ⁣preemptive ​measure to maintain economic momentum.” He⁤ added that “the strong market reaction shows that investors have⁣ confidence in the Fed.”

Looking at the featured stocks, the stock price⁣ of ‌Trump Media & ‍Technology Group, which reached the expiration of its mandatory custody period ⁣on this day, plunged 7.82% to hit a ‌new low. Intel closed ‌up 3.44% ‍after the Wall Street Journal (WSJ) ⁢reported that Qualcomm had ⁢made an acquisition ‍offer.

Treasury prices rose. As ​of ⁤3 ‍p.m.‌ in the New York bond market, the 10-year ⁤US Treasury‍ yield fell 1.3bp (1bp = 0.01%P) ‍from the previous day to 3.742%. The ‌2-year yield, which is⁣ sensitive to policy rates, fell 3.0bp to ‍3.602%. Bond yields move inversely to prices.

The US dollar showed mixed performance by currency. The dollar index, which shows the ⁣value of the dollar against six major currencies, rose 0.10% from the⁢ previous day to 100.72. The euro/dollar exchange rate rose 0.02%⁢ to 1.1163 dollars,⁢ and the dollar/yen exchange rate rose 0.90% to 143.91 yen.

International oil ‌prices fell. On the‍ New York Mercantile Exchange ‍(NYMEX), ​the price of West​ Texas Intermediate (WTI) crude oil for October delivery ⁤closed at $71.73 per ‍barrel, down 22 cents⁣ (0.3%) from the ‍previous day. On ⁤the ICE Futures Exchange, Brent ⁢crude oil for November delivery fell ⁢36 cents‌ (0.5%) to $74.52.

Gold prices rose, breaking $2,600 per ounce for ​the first⁤ time during the session. Gold futures on the New York Mercantile Exchange (COMEX)‍ closed at $2,646.20 per ​ounce, up 1.2% from the previous⁤ session. Spot ‌gold​ rose to ⁤$2,620.63 during⁣ the session, a⁣ new all-time⁢ high.

The CBOE Volatility Index (VIX), known ⁢as the “Wall‌ Street fear index,” fell 1.84% ⁢from ⁤the previous day to 16.03.