New York Stock Market Rebounds on Decline in U.S. Treasury Yields

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market, which had fallen sharply the day before, successfully rebounded. This was attributed to the easing of the rise in U.S. Treasury yields, which had been holding back the stock market's ascent.

[Image source=EPA Yonhap News]

On the 12th (local time), the Dow Jones Industrial Average rose 60.00 points (0.19%) to close at 31,068.69, the S&P 500 index increased by 1.58 points (0.04%) to 3,801.19, and the Nasdaq index gained 36.00 points (0.28%) to finish at 13,072.43.

On that day, the 10-year U.S. Treasury yield surged to 1.19% intraday before falling back to around 1.13%. After failing to break through 1.2%, the Treasury yield turned downward compared to the previous day.

The strong demand confirmed at the U.S. Treasury auction that day was interpreted as a factor that pulled down bond yields. The decline in yields drove stock prices higher.

As Treasury yields fell, the value of the U.S. dollar, which had recently been on the rise, also declined. The dollar index dropped about 0.4% to 90.015 that day.

President-elect Biden's announcement that he would unveil a large-scale economic stimulus package on the 14th also supported investor sentiment. Biden is preparing a stimulus plan that includes a $2,000 cash payment and is discussing strategies for passing it through the Senate with the Democratic Party.

The remarks from Federal Reserve Bank presidents concentrated on that day also helped stabilize the market. Loretta Mester, President of the Cleveland Fed, said there would be no need to change monetary policy even if the economy remains strong by the end of this year. Eric Rosengren, President of the Boston Fed, predicted that inflation would not reach the sustained 2% target over the next two years.

Esther George, President of the Kansas City Fed, expressed the view that inflation might rise faster than expected but that accommodative monetary policy should continue.

By stock, JP Morgan Chase shares rose 1.54%. Financial stocks were generally strong, reflecting expectations that rising Treasury yields would help improve long-term earnings.

Electric vehicle maker Tesla's stock showed a rise of over 4%. Tesla shares rebounded immediately after falling the day before.

Chinese electric vehicle maker Nio and semiconductor company Nvidia, which had reached record highs after announcing a partnership the day before, both declined together on this day.

General Motors (GM) shares surged 6.9% after announcing entry into the electric truck delivery business. This is the highest level since its relisting in 2010.

Twitter, which suspended the account of President Donald Trump that had been generating significant profits, fell 2.4% again on this day. Twitter experienced a sharp decline for two consecutive days following the suspension of Trump's account. Facebook shares also dropped about 2%. Technology leader Apple shares fell 0.14%, failing to turn upward.

February delivery West Texas Intermediate (WTI) crude oil closed at $53.21 per barrel, up 1.8% ($0.96) from the previous day. This is the highest closing price since February 21 of last year.

On the New York Mercantile Exchange, February delivery gold closed at $1,844.20 per ounce, down 0.4% ($6.60).

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