New York Stock Market Rally... Strong Consumer Spending Overcomes Powell's Warning (Comprehensive)

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market closed with strong gains on expectations of robust U.S. retail sales.

On the 16th (local time) at the New York stock market, the Dow Jones Industrial Average rose 2.04% to close at 26,289.98, the S&P 500 index increased 1.90% to 3,124.74, and the Nasdaq index gained 1.75% to 9,895.87.

Retail sales for May, announced before the market opened, surged 17.7% compared to the previous month, raising hopes for the effects of economic reopening. According to CNBC, the May retail sales growth rate was the highest ever on a monthly basis. It far exceeded experts' expectations of an 8% increase.

With the recovery of consumption, which accounts for two-thirds of the U.S. economy, confirmed, President Donald Trump also cheered. He emphasized the expansion of retail sales in his tweets and at a White House press conference, welcoming it as good news for the stock market and jobs. President Trump expressed confidence that a COVID-19 vaccine and treatment would be available within the year and claimed that the economy would recover early.

On the other hand, Federal Reserve Chairman Jerome Powell took a stance opposite to President Trump. He appeared at a Senate hearing that day and expressed concerns, saying, "There is serious uncertainty about the economic recovery." He cautioned against premature optimism about recovery, noting, "Although some recent positive indicators have emerged, 20 million people remain unemployed, and the unemployment rate stands at 13.3%."

The political media outlet Politico described the starkly different outlooks presented by President Trump and Chairman Powell, but the market moved more in line with President Trump's expectations that day.

Bloomberg News also fueled market expectations by reporting that President Trump is pushing for a $1 trillion infrastructure investment. According to the report, President Trump plans to use most of the funds for expanding and repairing roads and bridges and is considering investments in 5G mobile communications and ultra-high-speed internet sectors.

Concerns about a second wave of COVID-19 continue to spread. The Washington Post reported that Florida recorded a new high with 2,783 new infection cases.

In New York, where infection cases have stabilized, a sports event was decided to be held. On the same day, New York Governor Andrew Cuomo announced that the US Open tennis tournament, held annually in New York City, will proceed as scheduled without spectators.

Beijing, China, raised its COVID-19 response level to "Level 2" due to the spread of infections and suspended students' return to school.

International oil prices rose. July delivery West Texas Intermediate (WTI) crude oil closed at $38.38 per barrel, up 3.4% ($1.26). North Sea Brent crude oil traded above $40, gaining 2%.

Gold closed at $1,736.50 per ounce, up 0.5% ($9.30) from the previous day.

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