"Was it too high?" Three major U.S. indices all fell… Nvidia up 1.8% [New York Stock Market Briefing]

The three major New York stock market indices all fell. It is attributed to a surge in profit-taking selling.

On the 9th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 46,358.42, down 243.36 points (0.52%) from the previous day. The Standard & Poor's (S&P) 500 index fell 18.61 points (0.28%) to 6,735.11 from the previous session, and the Nasdaq closed at 23,024.63, down 18.75 points (0.08%).

In early trading, the S&P 500 and the Nasdaq hit record highs but later pulled back. By sector, all sectors declined except consumer staples. Industrials, energy, and materials fell more than 1%.

Nvidia rose 1.83%. This was after it was allowed to export graphics processing unit (GPU) chips to the United Arab Emirates (UAE). The Bureau of Industry and Security under the U.S. Department of Commerce announced the day before that it had issued an export license to Nvidia under a U.S.-UAE bilateral artificial intelligence (AI) agreement signed in May. However, the scale of authorized AI chip exports or the amount of UAE investment was not disclosed in detail.

On the news, Nvidia's stock widened intraday gains to as much as 3.27% and hit a record high. Its market capitalization exceeded $4.7 trillion intraday and even approached $5 trillion. However, amid the broader market weakness, it gave back some of its gains.

The Philadelphia Semiconductor Index, composed mainly of AI and semiconductor stocks, fell 0.29%. It was taking a breather after jumping more than 3% the previous day.

David Wagner, head of equities at Aptus Capital Advisors, said, "The market is trying to analyze or identify which partnerships will provide the highest return on invested capital," adding, "There has been rotational trading among some firms with those cyclical themes."

Oracle rose more than 3% on bargain buying despite recent margin controversy in its cloud division. U.S. big-box retailer Costco jumped more than 3% after September sales indicators came in solid, confirming that U.S. consumer spending remains robust. U.S. carrier Delta Air Lines rose more than 4% after its fourth-quarter earnings outlook exceeded market expectations.

The U.S. federal government's temporary shutdown had not been resolved that day. Both parties in the U.S. Congress have been voting daily to pass a seven-week stopgap funding bill, but it continues to be rejected.

According to the CME FedWatch tool, federal funds futures priced in an 81.5% chance of a 50bp (1bp=0.01% point) rate cut by December. It was 79.2% near the previous day's close.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) rose 0.13 points (0.8%) from the previous session to 16.43.

Jinyoung Ki, Hankyung.com reporter young71@hankyung.com