US and European Stock Markets 'Race Ahead' from the New Year

[Image source=Yonhap News]

[Asia Economy New York=Correspondent Kim Bong-su] The US and European stock markets surged relentlessly from the first day of the new year, buoyed by China's commitment to economic stimulus. All three major indices of the New York Stock Exchange (NYSE) hit record highs. In particular, Apple, a leading IT stock, surpassed $300 per share for the first time ever, reflecting strong optimism about the US economy.

On the first trading day of the new year, January 2 (local time), the Dow Jones Industrial Average closed at 28,868.80, up 330.36 points (1.16%) from the previous trading day. This was the largest single-day gain since December 6. The S&P 500 also rose 27.07 points (0.84%) to close at 3,257.85, while the Nasdaq closed at 9,092.19, up 119.58 points (1.33%) from the previous day.

Local media and experts analyzed that the imminent Phase One trade agreement between the US and China, along with China's announcement of its economic stimulus intentions, led to the strong market on the first trading day of the year. The day before, China's central bank, the People's Bank of China, decided to lower the reserve requirement ratio by 50 basis points (1bp=0.01 percentage point) starting January 6, stimulating investor sentiment. The People's Bank of China expects this reserve requirement cut to inject liquidity worth 800 billion yuan (approximately $114.9 billion / 133 trillion won). The Wall Street Journal (WSJ) reported, "Investors are buying related stocks in anticipation of potential gains from the improvement in China's economy."

The US and China are scheduled to sign the Phase One trade agreement on January 15. US President Donald Trump announced this news on December 31 and added that if Phase Two trade negotiations begin, he plans to visit Beijing, China.

With signs of improvement in trade relations with China, stocks sensitive to trade, such as Apple and semiconductor manufacturers, also surged. Apple's stock closed at $300.35 per share, up 2.3%, breaking the $300 mark for the first time ever. Apple's stock price had fallen to the $150 range early last year when the US-China trade war intensified but has since fluctuated in the $200 range. Semiconductor manufacturers AMD and Western Digital also rose 7.1% ($3.24) and 2.65%, respectively. The semiconductor-focused VanEck Vectors Semiconductor ETF rose 2.3% that day. By sector, industrial stocks led the market with a 1.81% increase, followed by technology stocks up 1.73%. Communication stocks also rose more than 1.3%.

Both inside and outside the New York stock market, the outlook for this year is positive. Reasons cited include easing trade tensions, the Federal Reserve's maintenance of a low interest rate policy, and steady economic growth.

Major European stock markets also rose. The UK's London FTSE 100 index closed at 7,604.30, up 0.82% from the previous close; France's Paris CAC 40 index ended at 6,041.50, up 1.06%; Germany's Frankfurt DAX index rose 1.03% to 13,385.93; and the pan-European Euro Stoxx 50 index gained 1.28% to 3,793.24.

This content was produced with the assistance of AI translation services.