'Employment Data Relief' NY Stock Market and Treasury Rally... Bitcoin Down 0.6%

[Image source=EPA Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market continued its record-breaking rally, buoyed by the assessment that the June employment data was positive without triggering interest rate hikes.

On the 2nd (local time), the Dow Jones Industrial Average rose 152.82 points (0.44%) to close at 34,786.35, the S&P 500 index increased by 32.40 points (0.75%) to 4,352.34, and the Nasdaq index jumped 116.95 points (0.81%) to 14,639.33.

The 10-year Treasury yield fell to 1.43% that day. A decline in Treasury yields indicates a rise in bond prices.

The employment data released by the Department of Labor that day led both the stock and bond markets to strength.

Major tech stocks surged simultaneously due to the effect of falling interest rates. Apple rose 1.9%, while Amazon, Microsoft, and Alphabet all gained over 2%.

Although employment increased, the rise in the unemployment rate suggests that the Federal Reserve (Fed) is unlikely to be prompted to raise interest rates early.

The U.S. Department of Labor announced that nonfarm payrolls increased by 850,000 in June, exceeding the market expectation of 706,000 compiled by The Wall Street Journal (WSJ).

The unemployment rate for June rose to 5.9%, higher than the previous month's 5.8% and the market expectation of 5.6%.

Wages also increased, but the stagnation in labor force participation indicates that expanding employment is not easy.

President Joe Biden, in a speech on the employment data, said, "This is historic progress that is pulling our economy out of the worst crisis in 100 years," adding, "Our economy is moving forward and overcoming the pandemic," but the market still expects a long time for employment recovery.

The market anticipates that the Fed may provide hints about tapering or early rate hikes in the minutes of the June Federal Open Market Committee (FOMC) meeting to be released next week.

CNBC predicted that just as the April minutes hinted at possible rate hikes in 2023 through the dot plot, the June minutes could also present surprising content to the market.

With the International Monetary Fund (IMF) recommending the need for U.S. rate hikes in 2022, there may have been discussions among committee members about early rate hikes or tapering. Attention is also focused on whether Fed Chair Jerome Powell will continue to deny the need for early rate hikes.

The stock price of China's largest ride-sharing company, Didi Chuxing, fluctuated wildly. After rising 1% on its first day of listing on the 30th of last month and surging 16% on the 1st, it fell 5.3% that day following news that Chinese authorities had launched a cybersecurity review and blocked new member registrations.

Tesla surged more than 3% intraday on news that it delivered 201,250 vehicles to customers in the second quarter but closed up only 0.14%.

Electric truck maker Rostown Motors plunged 11% after reports that the U.S. Department of Justice is investigating following the Securities and Exchange Commission (SEC).

West Texas Intermediate (WTI) crude oil prices fell 7 cents (0.1%) from the previous day to $75.16 per barrel. The slight decline came as markets watched the OPEC Plus (+) oil-producing countries' meeting. The OPEC+ producers failed to finalize production levels beyond August at the meeting and decided to hold another meeting on the 5th.

The cryptocurrency market saw little change. Bitcoin traded at $33,200, up 0.6%, Ethereum was down 1.4% at $2,080, and Dogecoin fell 1.1% to 24 cents.

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