U.S. Stocks Close Higher After CPI Release

The S&P 500 index rose 0.86%, and the Dow Jones Industrial Average also climbed 0.98%. The Nasdaq Composite Index increased by 0.96%, while the Philadelphia Semiconductor Index recorded a high growth rate of 1.8%.

After the CPI release, sector differentiation emerged in the U.S. stock market. System semiconductor companies and big tech firms generally showed strength, while memory companies like Micron Technology performed relatively poorly. Dell Computer, in particular, led the rally with an 11% surge.

The September Consumer Price Index (CPI) rose 0.4% month-over-month on a headline basis, and the core CPI, excluding volatile food and energy, also increased 0.3% month-over-month. These figures are interpreted as suggesting the Federal Reserve (Fed) may need to raise interest rates further.

At the same time, the consumer expectations index, as well as the overall consumer sentiment index, recorded an unprecedented decline from 51.7 to 47.8, showing the worst consumer indicators since 2007.

One of the biggest factors behind the CPI increase was rising energy prices. Energy prices rose 2.1%, and gasoline prices, in particular, increased by 3.9%. High oil prices can reduce households' real disposable income, leading to a contraction in consumption. Expert Park Sa-jeon pointed out that "if the money left in people's pockets decreases, excluding commuting costs, consumption will decrease accordingly." He also emphasized that the rise in diesel prices is particularly severe and is a major factor stimulating inflation.

The bond market analyzed that there is a very high possibility of market interest rates surging, anticipating a depreciation of the dollar. It was even diagnosed that addressing inflation through interest rate hikes could help stabilize the market.

In particular, the 1-year yield rose by 0.05%p (5bp), and the 3-month yield surged by 0.06%p (6bp), breaking through 4%. This reflects the market's expectation that the Federal Reserve's (Fed) tightening stance will continue.

The main reason is that refining facilities were damaged by the war, leading to a sharp decrease in the supply of petrochemical raw materials and refined products. This situation is acting as a strong factor for the stock prices of domestic refinery companies.

Market observations suggest that Japan could raise its benchmark interest rate one or even up to three times. As a result, the dollar index rose to 99.12, and the won/yen exchange rate is hovering in the late 800s to early 900s. Analysis also suggests that if the yen breaks 140 against the dollar, it could become a risk factor for the global market.

A repetitive speculative structure formed where money was borrowed against real estate to reinvest in real estate, creating a 'myth of invulnerable real estate price increases.' However, this bubble ultimately collapsed with the stock market crash of 1990, despite the continued soaring of the real estate market.

Instead of direct conflict expression, indirect methods like 'nighttime escape' were used when opinions differed, making leaders aware of public dissatisfaction to prevent brain drain. This cultural background is believed to make leaders consider public discontent when making important policy decisions, such as the timing of interest rate hikes, potentially causing them to miss appropriate timing.

As loans were restricted, real estate prices fell, leading to impairment of collateral value. The burden of maturity repayment increased, but with no buyers for real estate, a vicious cycle of public perception of falling house prices spread.

The concern highlighted was the market becoming desensitized to continuous interest rate hikes.

He warned that the current pace of AI technology development is too fast, and serious problems could arise if not prevented. This is drawing attention in conjunction with growing concerns about AI control, such as the recent unauthorized hacking of OpenAI's undisclosed model on Hugging Face.

This is part of an effort to prepare for the potential risks of AI technology and develop it in a direction beneficial to humanity.

Regarding discussions on artificial intelligence (AI) regulation, some experts, such as David Dacks, expressed skepticism. They worried that evaluation periods, such as regulatory exemptions and antitrust waivers, could be disguised as independent while actually being attempts to control competitors. It was also pointed out that countries like China are unlikely to participate in global agreements, and AI regulation could be used as a tool for regulatory capture or political psychological warfare.

Former U.S. President Donald Trump expressed the view that the nation that wins in the artificial intelligence (AI) industry will ultimately lead the world. He emphasized that while certain safeguards are necessary for AI development, some voices are overly negative about AI, and pessimism should be guarded against.

This statement underscores the importance of building a self-reliant ecosystem for AI technology to have a positive long-term impact on the economy and society, beyond short-term results.