Wall Street Mixed as Oil Drops and Semiconductors Correct; Nasdaq Down 0.2%

New York City's stock market closed mixed on the 28th local time as recovering investor sentiment from falling international oil prices coincided with a correction in the semiconductor sector.

Semiconductor stocks, including SK hynix American Depositary Receipts (ADRs), continued their steep decline amid ongoing investor caution regarding the sustainability of artificial intelligence (AI) investments.

On this day, the Dow Jones Industrial Average rose 537.24 points, or 1.03 percent, to close at 52,747.32.

The S&P 500 index finished up 15.60 points, or 0.21 percent, at 7,428.78.

The tech-heavy Nasdaq Composite Index dropped 55.17 points, or -0.22 percent, to close at 24,876.91.

The New York stock market showed a rotational trading pattern where old economy sectors gained strength amid a deep correction in semiconductor stocks that had rallied this year.

In particular, Dow components Coca-Cola and paint maker Sherwin-Williams posted earnings surprises, rising 5.0 percent and 8.3 percent respectively to lift the index.

Software (SW), data analytics, and information technology (IT) consulting sectors, whose stock prices had been sluggish this year due to concerns over disruptive innovations brought by AI, also showed a synchronized rise.

Salesforce rose 4.6 percent, while Cognizant Technology (6.9 percent), Accenture (6.9 percent), FactSet (6.8 percent), Adobe (4.8 percent), and ServiceNow (4.8 percent) also posted significant gains.

Conversely, the semiconductor sector continued its sharp downward trend driven by strong selling pressure.

The Philadelphia Semiconductor Index, comprising 30 major U.S.-listed semiconductor stocks, plunged 4.5 percent to extend its losing streak to four consecutive sessions.

Micron plummeted 8.9 percent, alongside steep drops in AMD (-8.2 percent), Intel (-5.9 percent), Qualcomm (-4.2 percent), and Marvell Technology (-7.8 percent).

SK hynix ADRs fell 8.98 percent, extending their steep decline to three straight sessions.

SK hynix ADRs are currently down about 13 percent compared to their initial public offering (IPO) price of $149.

Ross Mayfield, an investment strategist at Baird, told CNBC, "A really broad-based rotation is taking place," adding, "This momentum retracement, which has lasted 6 to 8 weeks, has much more to do with technical market factors than changes in fundamentals."

International oil prices tumbled for the third consecutive session, with West Texas Intermediate (WTI) crude futures falling below the $80-per-barrel mark, serving as a positive factor for investor sentiment.

On this day, Brent crude futures dropped 4.8 percent to close at $84.09 per barrel, while WTI futures fell 4.1 percent to finish at $79.26 per barrel.

Investors are keeping a close eye on the results of the U.S. Federal Open Market Committee (FOMC) meeting on the 29th.

While Wall Street banks expect the Federal Reserve to freeze interest rates at the current 3.50 to 3.75 percent during this meeting, they do not rule out the possibility of a surprise rate hike by the Fed this month, taking into account uncertainties in the Middle East and rising inflation risks.

According to the CME Group's FedWatch Tool, the fed funds futures market priced in about a 70 percent probability that the Fed will freeze interest rates at this meeting.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.