[New York Stock Market Briefing] "Should Have Bought Broadcom Stock" as Shares Surge 24%... Market Cap Hits 'First' $1 Trillion

The semiconductor index surged, but major stock indices showed a rollercoaster market, leading to a mixed close on the New York Stock Exchange. U.S. Broadcom recorded strong performance, surpassing a market capitalization of $1 trillion for the first time.

On the 13th (U.S. Eastern Time), the Dow Jones Industrial Average on the New York Stock Exchange (NYSE) closed at 43,828.06, down 86.06 points (0.20%) from the previous session. The S&P 500 index fell 0.16 points (0.00%) to 6,051.09, while the Nasdaq Composite index rose 23.88 points (0.12%) to 19,926.72.

U.S. semiconductor company Broadcom's strong performance led to a surge in its stock price, spreading enthusiasm across semiconductor stocks. Broadcom's stock price surged more than 24% during the day, surpassing a market cap of $1 trillion for the first time. It became the ninth U.S. company to reach a market cap of $1 trillion, surpassing Warren Buffett's Berkshire Hathaway to become the 10th largest U.S. company by market cap.

After the market closed the previous day, Broadcom announced that its fourth-quarter revenue surged 51% year-on-year. Earnings per share (EPS) also exceeded market expectations at $1.42, compared to the expected $1.38. Particularly, the annual revenue from the artificial intelligence (AI) sector surged 220% year-on-year to $12.2 billion, bringing optimism to the market.

Broadcom's stock price has surged more than 100% this year. Over the past five years, it has risen by 590%. The strong performance of Broadcom led semiconductor stocks to join the rally, with the Philadelphia Semiconductor Index soaring more than 3%. NVIDIA and AMD fell more than 2%, but TSMC jumped more than 4%, Arm rose 2%, and Micron Technology increased more than 4%. Marvell Technology surged more than 10%.

Unlike the soaring semiconductor sector, major stock indices closed mixed after volatility. The Nasdaq index showed a rollercoaster market, rising up to 0.80% during the day and then plummeting to -0.43%. Among the 'Magnificent 7' giant tech companies, Tesla rose more than 4%, and Apple was slightly up, but all other stocks fell.

Tesla perceived it as positive news that President-elect Donald Trump's transition team recommended ending the car crash reporting requirements to Trump.

Meanwhile, blue-chip and traditional industrial stocks mostly remained flat.

The Dow recorded a seven-day losing streak, the longest since 2020, with the decline on this day. Luxury furniture and home decor retailer RH's stock jumped 17% after it raised its annual revenue forecast to a range of 6.8% to 7.2%, despite third-quarter results falling short of market expectations.

Joe Terranova, chief market strategist at Virtus Investment Partners, said, "We are not euphorically optimistic," adding, "Now is the time for investors to focus on specific sectors rather than expecting a broad market rise."

The U.S. import price index for November, released on this day, rose 0.1% from the previous month. With the October figure also revised down to a 0.1% increase, import prices showed a modest rise for two consecutive months.

According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of the federal funds rate remaining unchanged in December fell to 2.9% by the close. The CBOE Volatility Index (VIX) fell 0.11 points (0.79%) to 13.81 from the previous session.

Hye-won Ahn, Hankyung.com journalist anhw@hankyung.com