[New York Stock Exchange] Decline Due to NVIDIA Disappointment and Inflation Concerns... Nasdaq Down 1.9%

The major three indices of the New York Stock Exchange fell together. Disappointment in NVIDIA's new technology led to a sell-off centered on tech stocks, and indicators suggesting the robustness of the U.S. economy were released, shaking investor sentiment with the prospect that the Federal Reserve (Fed) may lower interest rates less.

On the 7th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 42,528.36, down 178.2 points (0.42%) from the previous session. The S&P 500 index fell 66.35 points (1.11%) to 5,909.03, and the tech-heavy Nasdaq Composite ended at 19,489.68, down 375.3 points (1.89%) from the previous session.

On this day, NVIDIA plunged more than 6%, leading the overall market decline. It is interpreted that despite NVIDIA CEO Jensen Huang's speech and unveiling of new technology at the world's largest electronics and information technology exhibition 'CES 2025', the disappointment outweighed the expectations. At this event, NVIDIA unveiled the Cosmos platform, which can accelerate robotics technology, and autonomous driving technology.

Cody Acree, an analyst at Benchmark, said, "Huang provided a broad lecture on the current state and direction of the AI industry as expected, and announced various hardware and software technologies," adding, "However, many investors seemed to expect more specific progress on Blackwell and the next-generation GPU platform Rubin."

He continued, "Huang's presentation was somewhat dull," and "the lack of clarity on NVIDIA's Rubin architecture, scheduled for release next year, increased the disappointment."

As expectations for NVIDIA's new technology waned, AI and semiconductor stocks also generally declined. The Philadelphia Semiconductor Index plunged 1.84%, with TSMC down 3.90%, Broadcom down 3.29%, ASML down 1.42%, and AMD down 1.71%. Only Micron Technology rose 2.67%.

Apple, Microsoft, and Meta recorded declines of around 1%, and Tesla fell more than 4%. Amazon fell 2.42%. On the other hand, Aurora Innovation surged 29% on news of a long-term partnership agreement with NVIDIA related to autonomous vehicles.

The announcement of job and service industry indicators that exceeded market expectations also acted as a burden on the stock market, raising concerns about the resumption of inflation.

According to the Institute for Supply Management (ISM), the service sector Purchasing Managers' Index (PMI) recorded 54.1 in December last year. This is up 2.0 points from the previous month (52.1) and above the market expectation (53.3), suggesting that the service industry is expanding further.

In particular, the price index among the sub-indices surged 6.2 points to 64.4 from the previous month (58.2), putting upward pressure on government bond yields. This index, which shows the costs paid by service companies for purchasing materials and services, rose to its highest level in about two years.

The job market also suggested continued robustness. According to the U.S. Department of Labor's Job Openings and Labor Turnover Survey (JOLTs) for November last year, the seasonally adjusted number of job openings was 8.098 million, up from 7.839 million in October.

Tom Hainlin, chief investment strategist at US Bank Asset Management Group, analyzed, "Inflation rates and Fed's interest rate expectations are being readjusted," adding, "This triggered a small sell-off in the stock market."

According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of the Fed holding the base rate this month was reflected at 95.2%. The probability of the rate being held until June also recorded 32.9%, up nearly 4 percentage points from the previous session.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) recorded 17.82, up 1.78 points (11.10%) from the previous session.

Jongseok Ko, Hankyung.com reporter jsk@hankyung.com