[New York Stock Market Briefing] Disappearing Santa Rally... US 3 Major Indices on a Downward Path

The three major indices of the New York Stock Exchange fell simultaneously. It seems that the 'Santa Rally' has disappeared after the Federal Reserve hinted at adjusting the pace of interest rate cuts.

On the 30th at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 42,573.73, down 418.48 points (0.97%) from the previous session. The Standard & Poor's 500 Index (S&P 500) fell 63.9 points (1.07%) to 5,906.94, and the Nasdaq Composite closed at 19,486.78, down 235.25 points (1.19%).

In the absence of clear catalysts, profit-taking sell-offs poured in, dampening expectations for a 'Santa Rally'. In the New York stock market, a Santa Rally typically occurs during the last five trading days of the year and the first two trading days of the new year, showing strong stock prices. However, this year-end, the market has been weak since the Fed hinted at adjusting the pace of interest rate cuts. The S&P 500 has fallen for three consecutive trading days, while the Nasdaq and Dow indices have declined for two consecutive days.

Among the Magnificent 7 (M7), six stocks showed weakness except for Nvidia (0.35%). Tesla (-3.3%) closed down for the third consecutive trading day. Microsoft, Amazon, and Meta also fell more than 1%. Broadcom, which has recently been noted in the stock market as an AI semiconductor stock, dropped 2.55%.

Boeing, which plummeted at the start of the session, closed down 2.31% from the previous day. It is presumed that investor sentiment froze due to the Jeju Air passenger plane disaster at Muan International Airport. The accident aircraft is a Boeing 787-800 model. The Korean government announced that it would conduct a special inspection of the aircraft introduced domestically.

'Bitcoin whale' MicroStrategy plunged more than 8%. This is due to the weak performance of Bitcoin prices. The company reportedly sold more than 592,000 shares of its stock from the 23rd to the 29th to purchase 2,138 Bitcoins.

Funds flocked to the bond market. In the bond market, the 10-year Treasury yield remained strong at around 4.55%. Especially after the Chicago Purchasing Managers' Index (PMI) data showed an unexpected decline, yields fell further. According to data released that day, the number of pending home sales in the U.S. increased for the fourth consecutive month in November, reaching the highest level since early 2023.

Natural gas futures prices surged 16%. This is due to weather forecasts predicting a cold wave centered in the eastern United States. Bloomberg reported that this is the largest daily increase since the futures trading of the product began in 2012.

Meanwhile, President Joe Biden declared Thursday, January 9, as a national day of mourning to honor the late President Jimmy Carter, and the U.S. stock market will be closed on that day.

Jin Young-ki, Hankyung.com reporter young71@hankyung.com