[New York Stock Market] Closes Lower on Semiconductor Weakness; Williams Remarks Trim Losses

Williams Sees Inflation Nearing Target Next Year
Says One More Rate Hike Is Needed This Year

All three major U.S. stock indexes closed lower on the 13th (local time) as semiconductor shares fell amid rising oil prices and concerns about the outlook for the artificial intelligence (AI) industry. However, the major indexes rebounded from their intraday lows after remarks by John Williams, president of the Federal Reserve Bank of New York, were reported late in the session.

The Dow Jones Industrial Average fell 180.45 points (0.35%) from the previous session to close at 51,670.10. The S&P 500, which is weighted toward large-cap stocks, fell 1.79 points (0.02%) to 7,805.45, while the Nasdaq Composite, which is weighted toward technology stocks, shed 41.52 points (0.15%) to finish at 27,204.38.

The New York Stock Exchange. New York, U.S. - Correspondent Hwang Yoonju

Semiconductor shares, which had weakened the previous day, saw selling ease, but losses continued in individual stocks. SK hynix ADR fell 3.19%, Western Digital lost 1.61%, and Micron Technology dropped 3.62%. Seagate Technology also fell 0.80%, while Sandisk slipped 0.34%.

Concerns about competition following news of technological progress at Chinese memory chipmaker ChangXin Memory Technologies (CXMT), along with uncertainty over the outlook for AI investment, were seen as weighing on the semiconductor sector as a whole. The Philadelphia Semiconductor Index pared its losses to close down 0.2%.

Remarks by Williams in an interview with Bloomberg News that day helped ease some of the downward pressure. He said he maintained his view that one additional interest rate hike this year would be appropriate, adding, "At this point, I see no reason to think that rates will need to be raised further in 2027."

Williams made the remarks ahead of the release of key inflation data. Markets expect the Consumer Price Index (CPI) to rise more sharply in September. However, they expect underlying inflationary pressure, as measured by core CPI excluding food and energy, to ease.

Ian Lyngen, a BMO Capital Markets analyst, said that if a slowdown in core inflation is confirmed, the Federal Reserve (Fed) could take its time deciding when to raise rates next.

Meanwhile, Fed Governor Christopher Waller said rising long-term Treasury yields were curbing demand in interest-rate-sensitive sectors such as housing and automobiles. He said that although rising long-term rates were not the Fed's intention, they were having some of the effects of monetary tightening.

Third-quarter earnings from major U.S. banks also contributed to the market's decline. JPMorgan Chase fell 0.86%, while Wells Fargo dropped 3.10%. Although JPMorgan raised its 2026 net interest income outlook, its third-quarter revenue came in below market expectations. Wells Fargo was weighed down by net interest income and revenue falling short of forecasts. Goldman Sachs, meanwhile, reported third-quarter revenue above expectations but still closed slightly lower, down 0.23%.

Rebecca Walser, chief investment officer at Walser Wealth Management, said, "Major banks are still reporting solid results, but expectations were too high, and those expectations can pose a risk to every company during earnings season."

However, Bloomberg reported that the equities businesses of major banks are expected to post stronger results than their fixed-income, foreign-exchange and commodities businesses. The equities businesses of five major U.S. banks are estimated to have generated more than $66 billion in revenue during the first nine months of this year, about $3 billion more than the projected revenue of their fixed-income and other businesses.

International oil prices ended mixed as military tensions in the Middle East rose again despite the possibility of additional supplies of Russian diesel. Brent crude for December delivery fell 0.90% from the previous session to settle at $105.69 a barrel on the ICE Futures Exchange. West Texas Intermediate (WTI) crude for November delivery rose 0.43% to settle at $94.14 a barrel on the New York Mercantile Exchange.

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