NY Stock Market Rallies on Relief from US Default Risk... Focus on Employment Data

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Major indices on the New York Stock Exchange closed higher for the second consecutive day, buoyed by an agreement to temporarily raise the U.S. federal government debt ceiling.

On the 7th (local time), the Dow Jones Industrial Average rose 337.95 points (0.98%) to close at 34,754.94, the S&P 500 index increased by 36.21 points (0.83%) to 4,399.76, and the Nasdaq index climbed 152.10 points (1.05%) to finish at 14,654.02.

Senate Majority Leader Chuck Schumer of the Democratic Party announced that an agreement had been reached with the Republicans to raise the debt ceiling by $480 billion until December 3.

The Senate is scheduled to vote on the agreement at 8 p.m. that evening. As a result, the previously anticipated U.S. national default, expected on the 18th, is unlikely to occur within this year.

With the temporary suspension of the U.S. federal government shutdown and the national default crisis resolved for now, market attention is turning to the September employment report to be released the following day.

According to Dow Jones data, experts expect 500,000 new jobs in September and the unemployment rate to fall to 5.1%. The weekly initial jobless claims released that day showed a decline for the first time in three weeks, raising hopes for employment recovery.

The 10-year U.S. Treasury yield surged to 1.570%, which analysts interpret as reflecting the positive employment data. If employment shows strength, the Federal Reserve (Fed) is expected to have grounds to decide on tapering asset purchases in November.

Despite the sharp rise in Treasury yields, key tech stocks such as Apple, Alphabet, and Amazon rose, while Twitter jumped 4% on news that it may sell its mobile advertising division.

Cyclical stocks also showed strength. Automakers General Motors and Ford rallied, rising more than 4% and 5%, respectively.

Chinese electric vehicle maker Nio surged 6.9% after Goldman Sachs upgraded its investment rating from neutral to buy.

Denim manufacturer Levi Strauss soared 8.5% amid evaluations that its earnings exceeded expectations.

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