The three major U.S. stock indexes in New York were slightly higher in early trading on the 9th.
As of 10:33 a.m. on the 9th, at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average was up 13.73 points, or 0.03%, at 49,762.69. The Standard & Poor's (S&P) 500 was up 19.14 points, or 0.28%, at 6,951.44, and the Nasdaq composite was up 107.88 points, or 0.47%, at 23,139.09.
After technology stocks weakened last week on concerns about excessive expenditure on artificial intelligence (AI), bargain hunting appears to have flowed in. Nvidia rose more than 3%, and Microsoft and Broadcom were up in the 2% range.
However, gains are limited ahead of the Bureau of Labor Statistics (BLS) January jobs report and the consumer price index (CPI).
Labor indicators released last week showed unsettling figures. According to the ADP private employment report, January private payrolls increased by 22,000, about half of market expectations. According to the layoff report released by Challenger, Gray & Christmas (CG&C), planned job cuts by U.S. corporations in January were 108,435. That is the largest since 2009, right after the global financial crisis.
In the market, January nonfarm payrolls to be released on the 11th are expected to increase by 70,000, with the unemployment rate holding at 4.4%. Attention is on whether new hiring will fall below the market's lowest estimate of 70,000.
On the 13th, the January CPI will be released. The market forecast is a 0.3% rise from the prior month and a 2.5% rise from a year earlier. On a year-over-year basis, it remains above the Federal Reserve (Fed) target of 2%. However, it is lower than December's 2.7%.
That is because Kevin Warsh, the Fed chair nominee, has emphasized "AI productivity" while supporting interest rate cuts. Warsh has argued that if productivity improves with AI and supply expands significantly, the benchmark rate can be lowered without inflation problems. Typically, when rates are cut, liquidity is believed to increase and prices to rise.
As Warsh's "AI productivity" argument faces a test with the CPI, the U.S. mainstream economics community is strongly opposing the idea. According to the Financial Times (FT) the previous day, in an emergency survey by the Clark Center at the University of Chicago of 45 economists, about 60% of respondents said, "Within the next two years, the impact of AI on inflation or borrowing costs will be virtually zero."