U.S. producer prices came in lower than expected, leading to a broad rise in the New York stock market. With inflation and interest rate pressures easing, technology and memory semiconductor stocks surged, pushing the S&P 500 index to a record high.
On August 13, the Dow Jones Industrial Average closed up 69.72 points (0.13%) at 53,839.99. The S&P 500 index rose 50.49 points (0.65%) to finish at 7,798.99, marking its highest closing ever. The tech-heavy Nasdaq Composite also gained 214.54 points (0.81%), closing at 26,803.03.
The market rally was driven by a lower-than-expected Producer Price Index (PPI). According to the U.S. Labor Department, the PPI for July remained unchanged from the previous month, falling short of the market forecast of a 0.2% increase. Year-over-year, the PPI rose 4.7%, down from 5.5% in June.
Following a stable consumer price report, the PPI's unexpected stability has eased concerns about further interest rate hikes from the Federal Reserve. The yield on the 10-year U.S. Treasury note fell to 4.645%, down about 4.7 basis points from the previous day.
Among semiconductor stocks, memory companies saw significant gains. SanDisk surged 13.7% after announcing a long-term growth outlook, driven by expectations of increased memory demand due to the rise of artificial intelligence (AI).
Micron closed up 4.21% at $949.83, while SK Hynix's American Depositary Receipts (ADR) jumped 7.23% to $165.67, marking a second consecutive day of substantial gains after rising over 9% the previous day.
NVIDIA rose 0.54%, and major tech stocks like Meta Platforms and Microsoft also contributed to the index's increase.
In contrast, Cisco saw its shares drop more than 8% following its earnings report, which failed to meet market expectations.
A decline in international oil prices also bolstered investor sentiment. West Texas Intermediate (WTI) crude fell 2.4% to $81.25 per barrel, while Brent crude dropped 2.15% to $87.07. The recent pullback in oil prices has somewhat alleviated concerns about rising inflation.
After the market close, semiconductor equipment maker Applied Materials reported earnings that exceeded market expectations for the quarter and next quarter's outlook. However, the results were deemed insufficient to meet the heightened expectations for AI and semiconductor investments, leading to weakness in after-hours trading.
* This article has been translated by AI.
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