[New York Stock Exchange] Nasdaq Ends Lower as Semiconductor Sector Weakens Despite Oil Price Drop

International Oil Prices Plunge Over 4%
Dow Jones Rises 1% on Strong Earnings

On July 28 (local time), the three major U.S. stock indexes on the New York Stock Exchange closed mixed, as the ongoing weakness in the semiconductor sector persisted despite a decline in international oil prices.

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose by 537.24 points (1.03%) to close at 52,747.32. The S&P 500 index, which focuses on large-cap stocks, climbed 15.60 points (0.21%) to 7,428.78, while the tech-heavy Nasdaq index fell by 55.16 points (0.22%) to end at 24,876.91.

The Dow Jones index surged after earnings announcements fueled investor sentiment. Sherwin-Williams, a paint and coatings company, soared by 8.25% on the back of strong Q2 results, and Coca-Cola jumped 5% after both its sales and net profits exceeded expectations and the company raised its annual outlook.

In contrast, the Nasdaq index edged down. The semiconductor sector continued to underperform, with AI-related companies also losing momentum. Micron fell by 8.85%, AMD dropped by 8.15%, and Intel declined by 5.86%. However, Nvidia was up by 0.25%, Apple gained 0.94%, and Microsoft finished 1.09% higher.

According to Bloomberg, there is a growing trend of moving funds out of semiconductors and toward industries that are more sensitive to economic cycles, and stock prices are rising on the back of both earnings releases and falling oil prices.

Max Kettner of HSBC Holdings stated that strong earnings growth and low corporate valuations are among the factors maintaining the resilience of risk assets. He assessed, "The current market strength is due to the start of a robust earnings season, an improved outlook for the U.S. economy, low equity valuations, and other positive factors."

Ross Mayfield, investment strategist at Baird, commented, "A truly broad-based sector rotation is underway," adding, "This momentum rebound has unfolded over the past six to eight weeks and is much more related to technical aspects of the market than to any fundamental change."

Mayfield also noted, "It is hard to assert that consumer staples, financials, and industrials will continue their upward trajectory given the overall rise in interest rates and crude oil approaching $100 a barrel." This indicates that the shift toward sectors that are sensitive to economic cycles and interest rates, such as consumer staples, will depend on oil prices and rates maintaining their current levels.

International oil prices fell again today as tensions in the Middle East eased, following reports that Iran discussed the Strait of Hormuz issue with Saudi Arabia and Oman. On the New York Mercantile Exchange, September delivery West Texas Intermediate (WTI) crude plunged 4.1% to $79.26 per barrel. On the ICE Futures Exchange, September delivery Brent crude dropped 4.8% to $84.09 per barrel.

Due to lower oil prices, U.S. Treasury prices posted gains for a third consecutive day. Angelo Kourkafas at Edward Jones analyzed, "The impact of conflict-driven oil price fluctuations on energy prices is clear, and unless oil hits new highs, it suggests that the Consumer Price Index likely peaked in May."

He added, "The low increases in June's Consumer Price Index and Producer Price Index give the Federal Reserve more time over the summer to evaluate the effects of any energy supply disruptions and inflation."

Meanwhile, on July 29, the Federal Reserve's decision on the policy interest rate is scheduled. Investors anticipate the central bank will hold rates steady. According to FedWatch, market expectations for a rate hike in September are increasing.

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