[New York Stock Market Briefing] Tech Stocks Weaken as Interest Rates Rise... Dow Rises

On the 5th (local time), Gary Gensler, SEC Commissioner, is broadcasting before ringing the 'Opening Bell' at the New York Stock Exchange in New York./New York=Kim Beom-jun, Reporter

The New York stock market closed mixed. The yield on the U.S. 10-year Treasury rose to nearly 4.8%, leading to continued weakness in tech stocks, but the Dow Jones Industrial Average, a major stock index, rose.

On the 13th (local time) at the New York Stock Exchange (NYSE), the Dow Jones rose 358.67 points (0.86%) to 42,297.12, the Standard & Poor's (S&P) 500 Index rose 9.18 points (0.16%) to 5,836.22, and the tech-heavy Nasdaq Composite Index fell 73.53 points (0.38%) to 19,088.10.

The impact of the strong U.S. December employment figures released last weekend continued into this week. The yield on the U.S. 10-year Treasury closed at 4.79% on this day, peaking at 4.807% during the session.

This is due to the dampened expectations for a rate cut by the Federal Reserve (Fed). According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of the federal funds rate remaining unchanged until June rose to 47.2% by the close.

The possibility of a high-interest-rate environment unfavorable to growth stocks becoming more likely led to a notable weakness in tech stocks from the start of the session. Particularly, NVIDIA, leading the AI theme, fell 1.97% due to issues such as the overheating problem of its next-generation AI accelerator Blackwell and U.S. semiconductor chip export regulations. As a result, TSMC fell by over 3%, and Micron by over 4%.

Among the 'Magnificent 7', which includes major tech stocks like NVIDIA, all except Tesla fell. Tesla also fell during the session but turned upward due to news of continued increases in fourth-quarter vehicle sales and Morgan Stanley's target price upgrade.

Apple, NVIDIA, and Meta Platforms fell by more than 1%, while Microsoft, Amazon, and Alphabet were slightly down. Palantir, popular among individual investors, also fell by more than 3%.

On the other hand, many blue-chip stocks rose, seemingly due to bargain hunting, as their declines had been steeper.

JPMorgan Chase rose by more than 1%, and UnitedHealth Group, Caterpillar, and Amgen rose by more than 3%.

As wildfires in the Los Angeles area of the U.S. remained uncontrolled, the stock price of Southern California utility supplier Edison International plunged 11.89% on this day.

The stock price of U.S. pharmaceutical company Moderna fell by more than 16% due to a significant reduction in this year's sales forecast.

Quantum computing-related stocks were also weak on this day. After Mark Zuckerberg, founder of Meta, expressed a skeptical view of the quantum computing industry, Rigetti plummeted 32%, and IonQ fell an additional 13%.

Zuckerberg stated in a podcast last week, "I'm not a quantum computing expert, but from what I know, many people think it will take more than 10 years to become a very useful paradigm."

By sector, consumer staples, technology, communication services, and utilities fell, while other sectors rose.

Energy and materials surged by more than 2%, and healthcare, industrials, and real estate rose by more than 1%.

The CBOE Volatility Index (VIX) fell 0.35 points (1.79%) to 19.19 from the previous session.

Han Kyung-woo, Hankyung.com Reporter case@hankyung.com