New York stock market, semiconductor anxiety and Trump rally continue… Dow closes 0.69%↑

(New York = Yonhap News) Jinho Jin, Correspondent of Yonhap Infomax = The three major stock indexes of the New York Stock Exchange showed less increase, but continued the ‘Trump rally’ and closed with a rise.

As no major economic indicators or events were scheduled for the US federal holiday ‘Veterans Day’, the Trump rally that formed after the presidential election last week maintained its inertia.

On the 11th (US Eastern time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed trading at 44,293.13, up 304.14 points (0.69%) from the previous day.

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The Standard & Poor’s (S&P) 500 index closed at 6,001.35, up 5.81 points (0.10%) from the previous day, and the Nasdaq Composite Index closed at 19,298.76, up 11.99 points (0.06%) from the previous day.

All three major stock indices closed at record highs. The Dow index closed at the 44,000 mark and the S&P 500 index broke the 6,000 mark for the first time.

On this day, in observance of Veterans Day, the bond market was closed, but the stock market was open.

As stock prices rose sharply after the presidential election on the 5th in a relatively quiet atmosphere, some profit-taking movements also appeared. The Nasdaq index also expanded its decline to 0.48% during the day.

However, since there was a lack of material that could undermine expectations for the second Trump administration, market participants were using the stock price correction as a buying opportunity. The Nasdaq index overcame a correction and switched to a strong steadiness, and the S&P 500 index also changed from a weak stead to a strong stead.

The Dow didn’t even experience a correction as the Trump rally became more evident. Major technology stocks such as Apple and Microsoft fell more than 1%, and Intel fell 4.39%, but other major manufacturing and industrial stocks maintained their strength and continued their upward trend.

However, it was noticeable that the Philadelphia Semiconductor Index, which consists of semiconductor and artificial intelligence (AI)-related stocks, plunged 2.54% on this day. The Philadelphia index fell as much as 3.64% during the day.

The Philadelphia index suffered a decline for the second day due to speculation that semiconductor trade could be hit by tariffs under the Trump administration.

Trump attacked TSMC, saying, “Semiconductor companies are very wealthy,” and “They stole 95% of our business and it’s in Taiwan now.”

TSMC fell 3.55% on the New York Stock Exchange on this day. The news that the U.S. government notified TSMC to stop supplying high-performance semiconductors to China also had an impact.

Foreign media reported that the U.S. Department of Commerce sent an official letter to TSMC ordering it to restrict exports to China of cutting-edge semiconductors smaller than 7 nm (nanometers = 1 billionth of a meter) used to operate AI accelerators or graphics processing units (GPUs).

“This move is unlikely to have a significant impact on TSMC’s earnings,” said Matt Bryson, an analyst at Wedbush. “The impact remains to be seen.”

The financial industry, which is expected to benefit from the Trump regime, showed strength on this day as well. This reflects expectations that Trump will ease regulations in the banking sector.

JP Morgan Chase rose 1% and Goldman Sachs rose 2.2%. American Express also rose 1.87%.

Elon Musk’s Tesla, which contributed to Trump’s election, saw its stock price soar 9% on this day, solidifying its market capitalization position at $1 trillion. Tesla’s market cap exceeded $1 trillion for the first time in November 2021 and then again in January 2022.

The virtual currency market also laughed. Bitcoin surged more than 8%, exceeding the $87,000 level, on expectations that Trump would loosen regulations.

Coinbase, a virtual currency-related stock in the New York stock market, soared 23%, Mara Holdings surged 31%, and MicroStrategy, which invested a significant portion of the company’s assets in Bitcoin, also surged 26%.

“The Republican Party’s decisive victory has already unleashed ‘wild impulses’ despite high expectations,” said Lisa Charlotte, chief investment officer at Morgan Stanley Asset Management. “We see this as a trend driven by liquidity,” he said.

“It turns out that the market is right about the fiscal outlook for lower government spending and lower tax revenues,” said David Zervos, chief market strategist at Jefferies. “A reduction in government spending will be music to both the stock and bond markets.”

Looking at the U.S. presidential election and federal congressional elections counted up to this day, Trump ultimately secured 312 electoral votes, greatly defeating Harris, who secured 226, confirming his victory. In the Senate, vote counting is underway with the Republican Party securing 52 seats and the Democratic Party securing 46 seats.

In the House of Representatives, the Republican Party has 214 seats and the Democratic Party has 204 seats. The minimum requirement for a majority party is 218 seats, with the Republican Party leaving 4 seats.

By industry, consumer discretionary goods and finance rose by more than 1%. On the other hand, technology and real estate fell nearly 1%.

According to the Chicago Mercantile Exchange (CME) fedwatch tool, the probability that the benchmark interest rate will be frozen in December is 34.9%, and the probability of it being cut by 25 basis points is 65.1%. It was almost the same as the closing time the previous day.

The Chicago Board Options Exchange (CBOE) volatility index (VIX) recorded 14.97, up 0.03 points (0.20%) from the previous day.

jhjin@yna.co.kr

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2024/11/12 06:59 Sent