NY Stock Market Volatile Following Government Bond Yields... Focus on 'Shutdown' Resolution

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Despite the continued rise in U.S. Treasury yields, the Dow Jones Industrial Average and the S&P 500 rose in the New York stock market. The Nasdaq closed down again. Concerns over rising inflation have stimulated Treasury yields, firmly holding back tech stocks.

On the 29th (local time), the Dow Jones Industrial Average rose 90.73 points (0.26%) to close at 34,390.72, the S&P 500 increased by 6.83 points (0.16%) to 4,359.46, and the Nasdaq fell 34.24 points (0.24%) to 14,512.44.

On this day as well, Treasury yields influenced the major indices. The 10-year Treasury yield briefly entered the 1.4% range but rose to 1.546% in the afternoon, putting pressure on the stock market. The 10-year Treasury yield had reached 1.56% the previous day, the highest since last June.

Apple, which had sharply declined the day before, rose 0.6% but could not prevent the Nasdaq from falling. Alphabet and Amazon continued their downward trend.

Federal Reserve Chairman Jerome Powell led the decline in Treasury prices by forecasting at the ECB forum that inflation would continue to rise next year.

Benefiting from the rise in Treasury yields, the dollar index, which had been strong for several days, surpassed the 94 level on this day. It was the first time the dollar index exceeded 94 since September of last year.

The U.S. federal government shutdown crisis, which worsened investor sentiment, is showing signs of resolution.

Democratic Senate Majority Leader Chuck Schumer announced that the temporary federal budget would be processed within the day. Republican Senator Ron Paul also expressed a positive view on the temporary budget, signaling possible cooperation from the Republican Party. Therefore, it is widely expected that the urgent issue of the 'shutdown' will be resolved before the midnight deadline on the 30th through approval by the House of Representatives and President Joe Biden's signature.

The highlight of the stock market on this day was the strong performance of Dollar Tree, the '1-dollar shop.' Dollar Tree's stock had fallen earlier after revealing that rising logistics costs negatively affected its earnings, but it rose 16.49% after announcing share buybacks and plans to expand sales of products priced above 1 dollar. Dollar Tree's move was noted as an example showing that supply chain disruptions and resulting price increases are becoming a reality.

Semiconductor company Micron Technology fell 2% amid evaluations that both its earnings and outlook fell short of expectations. Nvidia and AMD also failed to avoid weakness.

Netflix rose 3% due to the effect of acquiring a game company to enter the mobile gaming market. Boeing rose 3.1% after signing a $23.8 billion supply contract with the U.S. Department of Defense.

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