US Treasury Yields Surpass 1.5%, Tech Stocks Plunge, Dollar Strengthens... Energy Stocks Surge

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] As U.S. Treasury yields rose intraday to 1.5%, technology stocks declined, causing major indices on the New York Stock Exchange to show mixed results.

On the 27th (local time), the Dow Jones Industrial Average rose 71.37 points (0.21%) to close at 34,869.37, the S&P 500 index fell 12.37 points (0.28%) to 4,443.11, and the Nasdaq index dropped 77.73 points (0.52%) to 14,969.97.

On this day, the 10-year U.S. Treasury yield surpassing 1.5% led the decline in technology stocks, dragging down both the S&P 500 and Nasdaq indices. Although the Dow Jones rose, the drop in tech stocks also pulled the S&P 500 index down.

The rise in the Dow Jones is interpreted as being supported by expectations that the spread of the Delta variant will peak soon. Albert Bourla, CEO of Pfizer, predicted a day earlier that the U.S. health situation could return to normal within a year.

Cruise line Carnival Corp rose 3.7%, United Airlines increased by 0.6%, and Boeing also gained 1.3%.

The 10-year U.S. Treasury yield rising to the 1.51% range marks the first time in three months. The 30-year Treasury yield also exceeded 2% for the first time since mid-July, highlighting a notable trend of bond selling.

Daniel Shay, Director at Simpler Trading, predicted, "If the 10-year Treasury yield breaks the resistance level, it could rise up to 1.7%."

The rise in U.S. Treasury yields led to a stronger dollar. The dollar index increased by 0.1% on the day.

Treasury yields have been rising continuously since the Federal Reserve (Fed) revealed through the dot plot that about half of its members expect a rate hike by the end of next year.

Benefiting from the rise in Treasury yields, bank and financial sector stocks showed a strong surge, rising as much as 2.9%.

Apple closed down 1% amid concerns over rising Treasury yields and potential iPhone supply delays caused by power shortages in China.

Energy-related stocks such as Occidental Petroleum showed strength due to the effect of rising oil prices.

On this day, West Texas Intermediate (WTI) crude oil prices rose $1.47 (1.99%) to $75.45 per barrel, reaching the highest level since October 3, 2018. Brent crude prices also climbed to $79.52 per barrel, approaching $80.

Goldman Sachs revised its Brent crude price forecast for 2022-2023 upward from $65-$75 to $81-$85 per barrel.

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