[Good Morning Stock Market] US Interest Rates Slightly Fall... Nasdaq Rises

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Junho Hwang] The yield on the US 10-year Treasury note closed down 0.037 percentage points at 1.695%. The decline in yields was driven by a sharp drop in the Turkish lira. As a result, the US stock market rose, led by technology stocks. Attention is focused on whether this will put upward pressure on the South Korean stock market, which is also affected by market interest rate volatility.

The US stock market rose due to the decline in interest rates. The Turkish government decided to dismiss the central bank governor who led the recent rate hike after four months. Consequently, the Turkish lira experienced heightened volatility, at one point plunging more than 17% against the dollar. This led to a rise in US Treasury prices and a fall in yields. Additionally, high-level talks between the US and China, as well as EU-China tensions over human rights issues, increased demand for safe-haven assets. With interest rates falling, the Dow Jones Industrial Average rose 0.32% to close at 32,731.20, the S&P 500 index increased 0.7% to 3,940.59, and the Nasdaq index gained 1.23% to finish at 13,377.54.

Comments from Federal Reserve officials also influenced the market that day. Thomas Barkin, President of the Richmond Fed, expressed hope that maintaining an accommodative monetary policy would help bring more people into employment. However, Fed Chair Jerome Powell stated that cryptocurrencies are closer to gold than the dollar, which contributed to lowering gold prices despite the preference for safe-haven assets. Powell did not make any remarks related to the economy or monetary policy that day but is scheduled to testify before Congress alongside Treasury Secretary Janet Yellen on the 23rd (local time).

On the same day, Tesla closed at $670.00 on the New York Stock Exchange, up 2.31%. The closing price on the last trading day of the previous week, the 19th, was $654.87. This was buoyed by a report from Ark Invest, a global investment firm led by Cathie Wood, predicting that Tesla's stock price could reach $3,000.

Deutsche Bank announced that Volkswagen is expected to surpass Tesla's sales within a year, causing Volkswagen shares to surge 14.68%. GM (-2.88%) briefly plunged 5.5% due to worsening semiconductor shortages caused by a fire at Japan's Renesas but closed with reduced losses. Apple (2.83%) rose on analysis suggesting that iPhone 12 sales will remain strong due to additional stimulus measures. Component stocks such as Skyworks (2.29%), Qorvo (1.91%), and Analog Devices (1.70%) also showed strength. AstraZeneca (4.04%) rose after results from US clinical trials showed 79% efficacy.

Jaekyun Ahn, a researcher at Korea Investment & Securities, stated, "This week, the total auction volume for 2-, 5-, and 7-year notes exceeds $180 billion," adding, "Attention will focus on auction boundaries and Fed officials' remarks." He further analyzed, "Once this is weathered, there appears to be little reason to push interest rates higher, similar to the first quarter."

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