Decline in Government Bond Yields Boosts New York Stock Market... Infrastructure Investment Stocks Perform Well

by Paek Jongmin

Published 23 Mar.2021 05:30(KST)

Tesla Shares Rise Over 2% on $3,000 Stock Price Forecast

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market closed strong amid a decline in Treasury yields. While the market remains cautious about inflation concerns, news that the U.S. government is preparing a $3 trillion infrastructure investment plan stimulated investor sentiment in related sectors.

[Image source=Reuters Yonhap News]

On the 22nd (local time), the Dow Jones Industrial Average rose 0.32% to close at 32,731.20, the S&P 500 increased 0.7% to 3,940.59, and the Nasdaq Composite climbed 1.23% to 13,377.54.

On the same day, the 10-year U.S. Treasury yield fell by 0.044% to 1.688%. The Treasury yield maintained a downward trend throughout the day without significant intraday fluctuations. This was seen as cautious trading ahead of the congressional testimonies by Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen the following day.

The market is also focusing on the upcoming Consumer Spending (PCE) report scheduled for release this week. A significant increase in consumer spending could reignite inflation concerns.

On the same day, The New York Times reported that economic advisors to the Biden administration are preparing to present a $3 trillion infrastructure investment budget to the president this week, continuing inflationary pressures. Wall Street had initially expected the Biden administration's infrastructure investment to be around $2 trillion.

This news led infrastructure-related stocks such as Caterpillar to rise.

Financial stocks fell sharply due to the decline in Treasury yields. JPMorgan Chase dropped by 2.6%, and Goldman Sachs also fell by 1.4%.

Electric vehicle maker Tesla showed a strong intraday gain of over 5%, influenced by ARK Investment Management's forecast of a $3,000 stock price by 2025, but closed with a 2.3% increase.

Leading stock Apple closed up 2.8%.