(Morning) The US market yesterday saw all three major indices decline, with sell-offs in healthcare due to demands for drug price reductions | Market Overview | Money Creation Money Forward Securities investment information and media useful for money.

【US Stock Market】New York Market

NY Dow: 44,130.98 ▼330.30 (7/31)

NASDAQ: 21,122.45 ▼7.23 (7/31)

1. Overview

The US Stock Market saw all three major indices decline on the previous day. The Dow Jones Industrial Average opened trading at $44,665, up by $204. Initial trading was slightly higher due to the perception that the economic indicators released in the morning were strong; however, the decline in expectations for an interest rate cut by the Federal Reserve and President Trump's demands for lower drug prices put pressure on healthcare-related stocks, causing a downward trend in the latter half of the day. Ahead of today's employment statistics on the 1st, selling for position adjustments compounded, leading to a final drop of $330, closing at $44,130.

The Nasdaq Composite Index, which has a high ratio of tech stocks, fell by 7 points to 21,122 points. The S&P 500 Index closed down 23 points at 6,339 points, continuing its decline.

2. Economic Indicators, etc.

The PCE price index for June rose 0.3% month-on-month in the core measure excluding the volatile energy and food sectors, matching market expectations, while it increased 2.8% year-on-year, slightly exceeding market forecasts. The number of initial jobless claims was 218,000, which was below market expectations, indicating a resilient labor market.

3. Sector Trends

In the S&P 500 sector index, 2 out of the 11 sectors rose. Communication Services increased by more than 2%, while Utilities saw a slight gain of less than 1%. On the other hand, 9 sectors declined, with Healthcare dropping in the late 2% range, Real Estate falling by over 1%, and 7 other sectors finishing with slight declines of less than 1%.

4. Individual Stock Trends

In the Dow average constituent stocks, 8 out of 30 stocks rose. Microsoft [MSFT], which announced solid earnings the previous day, rose nearly 4%, becoming the top gainer. Following that, 3M [MMM] and Amazon.com [AMZN] rose in the upper 1% range. On the other hand, 22 stocks declined, with UnitedHealth Group [UNH], which saw a downgrade in investment ratings from analysts, falling more than 6%. Similarly, Merck [MRK] in healthcare also dropped more than 4%, and a total of 4 stocks, including IBM [IBM], fell by more than 2%.

Outside of the Dow average component stocks, Meta Platforms [META], which showed strong earnings and a solid outlook, rose by 11.3%. On the other hand, it was reported that President Trump requested a reduction in the prices of Medicaid (health insurance for low-income individuals) covered drugs in a letter, leading to concerns over declining profits, causing Eli Lilly [LLY] to drop by 2.6%. Additionally, semiconductor stocks were sold off, with Qualcomm [QCOM] falling by 7.7% and Broadcom [AVGO] down by 3.0%.

5. Exchange Rates, Interest Rates, etc.

Long-term interest rates remained flat at 4.37% from the previous day. On the morning of August 1, the dollar-yen exchange rate is fluctuating in the high 150 yen range following the Bank of Japan's monetary policy meeting the day before.

VIEW POINT: Today's Perspective

The US Stock Market saw all three major indices decline the previous day. In response, the Japanese market is expected to have a weak start today. In particular, there may be associative selling in healthcare, as President Trump has demanded a reduction in drug prices. On the other hand, the depreciation of the yen is thought to support the lower levels. As the day progresses, a wait-and-see mood is expected to spread ahead of the July US employment statistics to be announced tonight.

(Monex Securities, Financial Intelligence Department, Keita Yamaguchi)