The U.S. stock market started lower due to economic instability due to sluggish economic indicators. On top of that, the TPU issue of Google has been highlighted and the volatility of Nvidia (-2.59 percent) has increased, which puts pressure on tech stocks overall. However, the stock rebounded after sluggish economic indicators made it clear that the Fed would cut interest rates in December. On top of that, the decision to ease regulations on banks and reports that Kevin Hessett is likely to be the chairman of the Fed, which is classified as a dovish tendency, have led the index to rise (+1.43 percent), Nasdaq +0.67 percent, S&P 500 +0.91 percent, Russell 2000 +2.14 percent, Philadelphia Semiconductor Index +0.16 percent)

*Variables: Increasing economic instability Vs. Expect interest rate cuts, easing regulations

The University of Michigan’s consumer sentiment index recently slowed from 53.6 to 51.0, but the consumer confidence index of the conference board released today also slowed significantly from 95.5 to 88.7. The expectation index, which indicates the outlook for the next six months, shrank from 71.8 to 63.2, below 80.0 which is interpreted as a sign of a recession for the 10th consecutive month. In general, government shutdowns, high prices, shrinking sentiment due to tariffs, and job insecurity are the main drivers. According to the spending plan, the healthcare sector surged and low-cost leisure increased, reflecting concerns over insurance premiums during the shutdown. However, spending on high-end products and services has been reduced. As for the job market, the difficulty of finding a job fell 1.3 percentage points to 27.5 percent, and the number of jobs in abundance also fell 1.2 percentage points to 14.6 percent, increasing job insecurity

Retail sales in the U.S. in September fell below market expectations (+0.4%) as the number of auto parts fell by 0.3%, while clothing stores (-0.7%) and online sales (-0.7%) also fell from the previous month. Gasoline (+2.0%) and retail stores (+2.9%) increased. Excluding food, automobiles, and construction, which affect GDP, sales shifted from 0.6% to 0.1%. In general, consumption is slowing. ADP reported that employment fell by 13,500 in the four weeks ending November 8, increasing anxiety over employment.

Meanwhile, the producer price index rose 0.3% month-on-month in September, in line with expectations. Excluding food, energy and trade services, prices rose only 0.1% below expectations, while core producer prices rose only 0.2%. On a year-on-year basis, it was announced at 2.7%, higher than the market’s expectation of 2.6%, but the core price was 2.6%, lower than the market’s expectation of 2.7%. Eventually, prices stabilized amid slowing employment and consumption, raising expectations for the Fed’s rate cut. On top of that, some media reported that White House National Economic Council Chairman Cabin Hesett is likely to announce the next Fed chairman before December 25. As expectations for a rate cut rose in December, reflecting economic indicators and political conditions, the U.S. 10-year Treasury bond rate fell below 4.0% and the dollar weakened, and the stock market turned upward

In the meantime, the interest rate on government bonds and the index rose in earnest after the news that the U.S. Federal Deposit Insurance Corporation (FDIC) finally corrected easing capital requirements (eSLR) applied to large banks. The eSLR is a regulation that forces large banks to accumulate more than a certain percentage of equity capital compared to their assets (including government bonds and cash), which makes them reluctant to buy government bonds. The relaxation is confirmed, allowing banks to hold more government bonds without the burden of additional capital expansion, which is positive for financial stocks due to higher interest income, higher share buybacks and higher bond trading income. Regional banks also rose, as expectations of a fall in government bond rates highlighted expectations of a rise in the value of their holdings.

*Featured Stocks: Nvidia, AMD Slump Vs. Finance, Pharmaceuticals, Retail Distribution Strong

Semiconductors: Nvidia, AMD Fall On Google TPU Chip Issue
Nvidia (-2.59%) plunged 7.1% and AMD (-4.14%) plunged 9.7% in early trading. The intensifying competition was affected as Google delivered good results using its own chips for Gemini 3.0. Of course, it is not likely to shrink immediately as it still uses general-purpose GPUs for learning, but the inference chip comes as it has been highlighted that individual companies will use their own chips. The related information will be raised during the UBS AI conference call on Dec. 2. AMD’s drop was larger because Meta Platforms is known to use AMD’s chips for inference, but it is estimated that the drop was large on the news that Meta was discussing purchasing Google TPU the previous day. However, the fall is greatly reduced as rebound buying still flows in during the market. Broadcom (+1.87%) is strong today after rising sharply the previous day in that it affects Google’s TPU chip production. Semiconductor companies such as Micron (+0.27%), Intel (+0.11%), and TSMC (+0.01%) remain flat. The Philadelphia Semiconductor Index fell 3.67%, turning higher to 0.16%

AI, Servers: Neo Cloud Companies Slump
Despite the news that it has been added to the S&P 500, SanDisk (-2.85 percent) opened for profit and turned downward. AMAT (+5.00 percent) gained ground after UBS raised its investment opinion and target price, citing surging DRAM spending related to AI and data center demand. However, RAM Research (+1.03 percent) also rose. As Google’s Gemini 3.0 highlights that large tech stocks can produce data centers with their own chips to ensure efficiency and profitability, neo-cloud companies such as Super Microcomputer (-2.52 percent), Irene (-2.10 percent), Coreweave (-3.14 percent) and Navius (-3.29 percent) are sluggish. AI service companies such as UI Pass (+2.25%) and C3AI (+4.88%) are mixed. Dell (-1.02%) posted lower-than-expected sales after the market closed, but raised sales in the next quarter and annual sales. As the outlook for AI server shipments was also revised upward, the market fluctuated after hours

Cars: Tesla rebounds amid expectations of rate cuts after starting lower on plunging European sales
Tesla (+0.39%) in October