Nasdaq Hits All-Time High... US Stock Market Defies Recession Fears

[Image source=AP Yonhap News]

[Asia Economy New York=Special Correspondent Baek Jong-min] Amid concerns over the sluggish US economy, the New York stock market soared once again. The Nasdaq index reached an all-time high, and the S&P 500 index also turned to an increase compared to the beginning of the year.

On the 8th (local time), the Dow Jones Industrial Average rose 461.46 points (1.7%) to close at 27,572.44, the S&P 500 index increased by 38.46 points (1.2%) to 3,232.39, and the Nasdaq rose 110.66 points (1.13%) to close at 9,924.74.

On this day, the major indices of the New York stock market continued their rally amid expectations of a rapid economic recovery. The surprise drop in the May unemployment rate announced last week continued to boost investor sentiment through this day. Additionally, New York City, which experienced the most severe COVID-19 outbreak in the US, entered Phase 1 of economic normalization, further raising hopes for economic recovery.

The US central bank, the Federal Reserve (Fed), also drove the market up by expanding funding support conditions for general businesses. On this day, the Fed announced that it would lower the minimum loan amount and raise the maximum loan limit for the Main Street Lending Program. The principal repayment deferral period was also extended. Due to the Fed's measures, more small and medium-sized enterprises became eligible for benefits from this loan program. Fed Chair Jerome Powell had previously indicated that the conditions of the Main Street Lending Program would be finalized soon. Following the Fed's announcement, the major indices in the New York stock market widened their gains near the market close.

Encouraged by the market rise, US President Donald Trump emphasized in his tweet on the same day, "A big day for the stock market. Next year will be the best year ever."

On the other hand, the negative assessments of the US economy that appeared consecutively on this day did not affect the market. The National Bureau of Economic Research (NBER) announced that the US economy entered a recession in February. The World Bank (WB) also downgraded its global economic growth forecast for this year to minus (-) 5.2%, estimating the US growth rate at -6.1% for this year.

International oil prices turned downward. July delivery West Texas Intermediate (WTI) crude oil closed at $38.19 per barrel, down 3.4% ($1.36) from the previous trading day. Brent crude also recorded a decline of over 3%. The drop in oil prices is interpreted as a result of Saudi Arabia's announcement to halt voluntary production cuts. Gold closed at $1,705.10 per ounce, up 1.3% ($22.10).

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