New York Stock Market Reignited by AI Rally, Fed Minutes Leave Challenges
On the 18th in New York (early on the 19th in Korea), U.S. stocks closed higher for a second straight session. The Dow Jones Industrial Average rose 0.25% to 49,656.63, the S&P 500 gained 0.56% to 6,880.27, and the Nasdaq Composite jumped 0.76% to 22,749.27. Eight of the 11 S&P sectors advanced, led by a more than 2% surge in energy and roughly a 1% rise in consumer discretionary, reflecting renewed risk-asset appetite.
Once again, AI was the market’s main driver. Nvidia climbed 1.6% after announcing a multi-year AI-chip supply agreement with Meta, which itself added 0.6%. Amazon and Microsoft also outperformed, and the software & services sector—recently hit by fears of intensifying AI competition—rebounded by just over 1%. In contrast, cybersecurity firm Palo Alto Networks tumbled more than 6% after lowering its profit outlook, underscoring the ongoing distinction between AI winners and laggards. Other notable movers included Cadence Design, Analog Devices, Global Payments and Moderna, each reacting sharply to company-specific earnings and regulatory news.
On the macro front, the release of the Fed’s January FOMC minutes refocused attention on the interest-rate path. While a majority of officials supported keeping rates unchanged, views diverged on when to begin cuts, and futures markets now price in about a 50% chance of a 25-basis-point reduction in June. At the same time, solid Q4 business equipment investment and growth data lent support to a “soft landing with gradual easing” scenario. In safe havens, gold futures traded below $4,900 per ounce, retracing part of their recent rally as investors awaited the Fed minutes and forthcoming PCE inflation figures.
In summary, investors—cognizant of an AI bubble and regulatory risks—are re-entering large-cap growth stocks following recent pullbacks, underpinned by the belief that the Fed will not embark on aggressive additional tightening. In the near term, volatility among growth names is likely to persist, depending on upcoming inflation and consumer data and AI-related earnings, suggesting that investors should focus on selective stock choices and sector diversification.