Market Mayhem: NYSE Takes a Wild Ride as CPI Numbers Spark Conflicting Reactions, Nasdaq Soars 2.17%
New York Stock Exchange Sees Sharp Rise Led by Technology Stocks
The New York Stock Exchange ended the day with a sharp rise led by technology stocks, despite initial disappointment over the August U.S. Consumer Price Index (CPI) results.
New York Stock Exchange
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The Dow Jones Industrial Average closed at 40,861.71, up 124.75 points (0.31%) from the previous day on the New York Stock Exchange (NYSE). The S&P 500 index closed at 5,554.13, up 58.61 points, or 1.07%, and the Nasdaq Composite Index surged 369.65 points, or 2.17%, to 17,395.53.
Major stock indices initially showed a sharp decline after the August CPI was released, mainly in blue-chip stocks. However, the focus shifted to the fact that the CPI results were generally satisfactory, and the stock index rebounded sharply as bargain hunters poured in.
The Philadelphia Semiconductor Index soared by 4.90%, particularly as buying pressure poured in, especially for technology stocks. Nvidia, which leads the artificial intelligence (AI) theme, surged 8.15% on the day, the highest increase among the ‘Magnificent Seven’, a group of seven large technology companies.
AI and semiconductor-related stocks also enjoyed strong buying, with Broadcom up 6.79%, TSMC up 4.80%, ASML up 6.49%, and AMD up 4.91%. On the other hand, consumer staples such as Procter & Gamble (-2.18%), Johnson & Johnson (-1.53%), and UnitedHealth Group (-1.55%) fell, reflecting concerns about an economic downturn.
“In isolation, the CPI numbers aren’t bad,” said Steve Sosnick, chief market strategist at Interactive Brokers. “The market didn’t want a higher-than-expected core number, but the August CPI numbers put a 50bp rate cut out of the water.”
According to FactSet, as of today, 171 stocks on the New York Stock Exchange have hit new 52-week highs, while 100 have hit new lows. By industry, technology jumped 3.25%, showing off its prowess. Consumer discretionary goods and communication services also showed increases in the 1% range.
The CME FedWatch Tool reflected an 85% chance of a 25bp cut in September, up about 14 percentage points from the previous day’s close of 71%. The CBOE Volatility Index (VIX) closed at 17.69, down 1.39 points (7.29%) from the previous close.