[New York Stock Exchange] Closes Mixed... Nasdaq Falls on Apple Price Hikes

International Oil Prices Rebound After Five Sessions
Dow Hits Intraday Record High

On the 25th (local time), the three major U.S. stock indices ended mixed. Apple, which announced price hikes for MacBooks and iPads, plunged and dragged down the Nasdaq Index. In contrast, the Dow Jones Industrial Average rose as buying activity centered on healthcare and financial sectors.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 51,920.63, up 71.71 points (0.35%) from the previous trading day. The S&P 500 Index, focused on large-cap stocks, fell by 0.73 points (0.01%) to 7,357.49, while the technology-heavy Nasdaq Index finished at 25,358.60, down 118.03 points (0.46%).

New York Stock Exchange. New York, USA – Photo by Yoonju Hwang

The market showed a bifurcated trend that day. After Apple announced price hikes for MacBooks and iPads, citing a sharp rise in component costs such as semiconductors, its stock plunged 6.12% by the close. Microsoft (MS) also dropped 3.46% after announcing its own price increases.

Elsewhere, Alphabet dropped 0.46% and Meta fell 2.65%. Concerns that rising semiconductor prices could squeeze the margins of major big tech companies appear to have triggered selling pressure.

IBM closed down 1.67% from the previous session. Although IBM's stock briefly climbed more than 2% after unveiling the world’s first technology capable of producing chips smaller than 1nm (1nm = one-billionth of a meter), it eventually turned lower by the close.

This announcement comes amid intensifying competition to develop semiconductors that can handle increased artificial intelligence (AI) workloads, with the company stating that production could start within the next five years.

Zed Ellerbrook of Argent Capital Management said, "The prices of all electronic products containing semiconductor components, such as TVs and cars, will rise." He added, "We expect substantial ripple effects from high inflation and technology supply chains," and noted, "Consumers today are resilient enough to withstand these price increases."

The Personal Consumption Expenditures (PCE) price index for May, which attracted significant market attention, slightly underperformed expectations but still recorded the highest rate of increase in over three years. As the energy prices soared due to the Iran war and core inflation also rose again, pressure on the Federal Reserve to raise rates within the year is expected to intensify.

The U.S. Bureau of Economic Analysis (BEA), under the Department of Commerce, announced that the PCE price index for May rose 4.1% from the same month a year earlier. This marks the highest rate since April 2023. Compared to the previous month, the index increased by 0.4%.

The core PCE price index, which excludes the volatile food and energy categories, rose 3.4% from a year ago and 0.3% from the previous month. The year-over-year increase in the core PCE was the highest since October 2023.

Price increases were led by energy. Following the Iran war, international oil and gasoline prices surged, pushing up the prices of energy-related goods and services significantly. In addition, prices continued to rise in financial services and insurance, housing, medical care, and transportation services, indicating that inflationary pressure may be spreading beyond just the energy sector.

Despite high inflation, both consumer spending and income grew more strongly than expected. Personal consumption expenditures in May increased by 0.7% from the previous month. Real consumption, excluding the effects of inflation, also rose by 0.3%, breaking out of April's stagnant trend. Personal income also grew by 0.7%, with wages and salaries up by 0.4%. Real disposable income posted its first increase this year.

International oil prices rebounded after five sessions. This was due to heightened geopolitical risk after a ship attack incident in the Strait of Hormuz.

On the New York Mercantile Exchange, August delivery West Texas Intermediate (WTI) crude oil futures settled at $71.92 per barrel, up 2.25% from the previous session. On the ICE Futures Exchange, August delivery Brent crude futures closed at $75.26 per barrel, up 2.06% from the previous session.

U.S. Treasury yields fell slightly. The yield on the 10-year U.S. Treasury note dropped by more than 1 basis point (1bp = 0.01 percentage point) to 4.384%.

This content was produced with the assistance of AI translation services.