[New York Stock Market] Major Indices Close Higher on Inflation Slowdown... Quantum Computing Stocks Surge Again

"Expectations for Fed Rate Cut Slightly Increased"

The New York stock market closed sharply higher, buoyed by inflation slowdown indicators and earnings announcements from major U.S. banks.

On the 15th (local time), the Dow Jones Industrial Average at the New York Stock Exchange closed at 43,221.55, up 703.27 points (1.65%) from the previous trading day. The large-cap S&P 500 Index and the tech-heavy Nasdaq Composite also surged by 1.83% and 2.45%, respectively.

The U.S. Department of Labor reported that the U.S. Consumer Price Index (CPI) rose 2.9% year-on-year in December last year. The core CPI, excluding volatile food and energy, rose 3.2%, lower than the previous month's 3.3%. Wall Street had initially expected a 3.3% increase.

The milder-than-expected figures slightly raised expectations that the Federal Reserve (Fed) will cut rates by 0.25 percentage points by June. The possibility of two rate cuts by the end of the year also increased.

According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds futures market reflected a 97.3% probability that the Fed will hold rates steady at the upcoming Federal Open Market Committee (FOMC) meeting on the 28th-29th. Following the CPI announcement, the yield on the 10-year U.S. Treasury note plummeted 16 basis points (1bp=0.01%) to 4.663%.

Major banks kicked off the fourth-quarter earnings season with results that exceeded market expectations. JP Morgan Chase reported strong sales driven by bond trading and investment banking (IB) performance, while Goldman Sachs and Citigroup also announced results that significantly exceeded market expectations. Shares of Wells Fargo and BlackRock, the world's largest asset manager, also surged on strong earnings.

Among individual stocks, the 'Magnificent 7', referring to seven major tech companies, all saw their stock prices rise.

Tesla rose more than 8%, while NVIDIA, Meta Platforms, and Alphabet each gained 3%. Microsoft and Amazon rose more than 2%, and Apple also increased by 1.97%.

After Microsoft announced its enterprise quantum computing solution 'Quantum Ready' program, related stocks that had been sluggish in recent days surged. Rigetti Computing soared 47.93% the previous day and jumped more than 22% today. IonQ surged more than 33%.

Jungdong Noh, Hankyung.com reporter dong2@hankyung.com