(New York = Yonhap News) Jinho Jin, Yonhap Infomax Correspondent = The three major stock indices of the New York Stock Exchange ended mixed.
Tensions increased as Ukraine fired long-range missiles at the Russian mainland and Russia responded by revising its nuclear weapons rules, but low-price buying flowed in as the country refrained from escalating the war.
New York Stock Exchange
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On the 19th (US Eastern time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed trading at 43,268.94, down 120.66 points (0.28%) from the previous day.
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The Standard & Poor’s (S&P) 500 index closed at 5,916.98, up 23.36 points (0.40%) from the previous day, and the Nasdaq Composite Index closed at 18,987.47, up 195.66 points (1.04%).
Before the opening, fears of an escalation of war dominated the market as Ukraine launched its first long-range missile at Russia.
The Russian Ministry of Defense announced that the Ukrainian military fired six ATACMS missiles into the border area of Bryansk Oblast on this day. ATACMS is a long-range tactical ballistic missile provided by the United States.
Russia has warned that long-range missiles are part of the West’s participation in the war, as Ukraine does not have the ability to operate long-range missiles on its own. As Ukraine attacked its mainland with long-range missiles, Russia responded by revising its nuclear doctrine, seeing it as direct intervention by the West.
This revision includes the provision that any attack by a non-nuclear-weapon state supported by a nuclear-weapon state will be considered a joint attack. It also stated that it could respond with nuclear weapons to a conventional weapons attack that poses a ‘grave threat’ to the sovereignty and territorial integrity of Russia and its allies. This ultimately means that nuclear weapons could be used against Ukraine.
On this news, U.S. stock index futures fell by more than 1% before the market opened that day. It kept pace with the major stock indexes in the European stock market plummeting by more than 1%.
However, as the United States and Russia refrained from escalating the war, the stock index rebounded sharply.
However, the prevailing analysis is that the anxiety surrounding the Ukraine war will continue to be a factor weighing down the stock market.
Ghoraf Malik, chief investment officer at Palace Capital Advisors, said, “Heightened geopolitical tensions are a risk to the market and will continue to be so.” He added, “The combination of Russia’s heightened war rhetoric and the uncertainty of the U.S. government’s response could lead to increased volatility.” He said.
On this day, U.S. Treasury bond prices and the dollar index also decreased their rise as the preference for safety eased due to the atmosphere of refraining from escalating war.
In an investment note, RBC Wealth Management said, “We need to keep an eye on the U.S. 10-year Treasury bond rate and the value of the dollar,” and added, “Treasury bond rates and the dollar are more important macroeconomic catalysts for the stock market.”
While all seven giant technology companies (M7) rose, Nvidia soared nearly 5% a day ahead of its third quarter earnings announcement. It is interpreted that investors have begun to buy in advance due to expectations of performance.
Tesla rose by more than 2% on expectations that the second Trump administration will lift self-driving regulations.
In keeping with Nvidia’s strength, there was a strong atmosphere led by artificial intelligence (AI) and semiconductors.
TSMC rose more than 1%, and Arm recorded a rise of 3.42%. AMD, Qualcomm, and Micron Technology were also strong. On the other hand, Intel fell more than 2%.
Super Micro Computer, which was embroiled in allegations of accounting fraud and was on the verge of delisting, saw its stock price soar by 31%. This is because the relevant documents were submitted to the Securities and Exchange Commission (SEC) after the market closed the day before the annual report submission deadline and a new independent audit firm was appointed.
Walmart’s stock price jumped 3% as its sales and earnings per share (EPS) exceeded market expectations for 10 consecutive quarters. Walmart’s performance is considered an indicator of the health of American consumption.
MicroStrategy, which made a large investment in Bitcoin, rose more than 11% in its stock price after disclosing the purchase of more than 50,000 additional Bitcoins. It has been rising sharply for the second day.
IG Group market analyst Chris Beauchamp said, “If the Kremlin (Russian presidential palace) responds with force, it could lead to a terrible misjudgment around the world.”
Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, said in a public statement that day that it is still unclear how far the policy interest rate should be lowered.
“Now is the time to start easing monetary policy constraints, but it remains to be seen how much lower rates will go or where they will ultimately settle,” he said.
By industry, technology and communication services rose by more than 1%. Energy, finance, health care, materials, and industry fell.
According to the Chicago Mercantile Exchange (CME) FedWatch tool, the probability that the benchmark interest rate will be frozen in December in the federal funds rate futures market was around 41% at the end of the day. It was almost the same as the day before.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) recorded 16.35, up 0.77 points (4.94%) from the previous day.
jhjin@yna.co.kr
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2024/11/20 07:00 Sent
Great to have you here today. Our first guest is a market analyst who has been closely monitoring global economic trends, and our second guest is an expert in geopolitical affairs. We will begin with the market analyst and discuss the performance of stock indices in the light of recent war tensions between Russia and Ukraine.
Market Analyst: Thank you for having me. The recent escalation in the Russia-Ukraine conflict has certainly had an impact on global stock markets, and it’s interesting to see how investors are reacting. Can you give us your thoughts on what factors are driving these market movements, and which sectors or companies seem to be faring better or worse in this environment?
Geopolitical Expert: Of course. As you mentioned, the recent missile attack by Ukraine on Russian territory has raised concerns about a potential escalation of the conflict, leading to increased volatility in global stock markets. Additionally, the revisions to Russia’s nuclear doctrine have added another layer of uncertainty. We’ve seen mixed reactions in the stock indices, reflecting both fear and hope that the situation will stabilize. The tech sector, particularly AI and semiconductors, have performed relatively well, perhaps due to investor optimism about their resilience in times of geopolitical tension. Conversely, defense stocks have seen an uptick as investors seek safety in traditionally defensive industries.
Market Analyst: That makes sense. On that note, the possibility of nuclear weapons being used has created a sense of unease among investors. Do you think this will continue to be a significant factor influencing market movements, or could we see a shift in focus back to fundamentals like corporate earnings and economic indicators?
Geopolitical Expert: The threat of nuclear war is certainly a major concern, and it’s not going away anytime soon. However, we have seen examples in the past where markets can eventually move past these worries and refocus on other factors. If tensions ease and cooler heads prevail, as we hope, then yes, fundamentals could become more important again. But for now, geopolitics remains a major driver for the market.
Market Analyst: Switching gears a bit, the Federal Reserve’s interest rate policies have also been in the
