NY Stock Market Rebounds... Overcoming Fed Asset Purchase Reduction Concerns (Update)

by Paek Jongmin

Published 21 May.2021 05:36(KST)

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The U.S. New York stock market overcame the adverse effects of the cryptocurrency price crash and the Federal Reserve's (Fed) indication of a possible reduction in asset purchases, successfully rebounding.

On the 20th (local time), the Dow Jones Industrial Average rose 188.11 points (0.55%) to close at 34,084.15, the S&P 500 increased by 43.45 points (1.06%) to 4,159.13, and the Nasdaq rose 236.00 points (1.77%) to 13,535.74. Major indices in the New York stock market broke free from three consecutive days of decline.

On this day, the indices were led by technology stocks, which are negatively affected by rising interest rates. The U.S. 10-year Treasury yield, which had shown strength the previous day, turned downward again, restoring investor sentiment in tech stocks. Most major tech stocks such as Apple, Amazon, Alphabet, and Facebook rose by about 1%.

CNBC reported that although the Federal Reserve hinted at a possible reduction in asset purchases the day before, the market digested the bad news on this day.

Reflecting this, the U.S. Treasury yield also fell by 0.049 percentage points to 1.634% compared to the previous day. A decline in Treasury yields means a rise in bond prices.

Cryptocurrency-related stocks, which had plunged collectively the previous day, mostly rose.

Cryptocurrency exchange Coinbase rose 3.8% after Wedbush Securities recommended a buy. Tesla increased by 4.1%, and MicroStrategy rose 4%.

The rise in cryptocurrencies slowed as the U.S. Treasury announced that cryptocurrency transactions over $10,000 must be reported to the IRS.

Bitcoin traded at $40,000, up 1.3% from 24 hours earlier; Ethereum rose 5% to $2,800; and Dogecoin traded at 39 cents, up 8%.

Sweden's newly listed dairy company Oatly closed at $20.27, up 19.26% from its initial public offering price.

Oil prices were weak. At the New York Mercantile Exchange, the June West Texas Intermediate (WTI) crude oil price fell $1.31 (2.1%) to close at $62.05 per barrel. This closing price was the lowest since April 26.