NY Stock Market Closes Higher Overcoming Inflation... Treasury Yields Decline

[Image source=Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The major indices of the New York stock market closed higher despite concerns over a sharp rise in inflation.

On the 10th (local time), the Dow Jones Industrial Average rose 216.30 points (0.60%) to close at 35,970.99, the S&P 500 index increased by 44.57 points (0.95%) to 4,712.02, and the Nasdaq index jumped 113.23 points (0.73%) to 15,630.60.

The S&P 500 index rose 3.82% this week, reaching an all-time high. The Dow and Nasdaq indices rose 4.02% and 3.61%, respectively, showing strength by overcoming concerns about the Omicron variant and the possibility of early interest rate hikes by the Federal Reserve (Fed) due to rising inflation.

The VIX, known as the fear index, also fell 2.89 points (13.39%) to 18.69, indicating overall stabilization in investor sentiment.

The November Consumer Price Index (CPI), released before the market opened that day, rose by 6.8%, marking the highest level since 1982. The increase was larger than the previous month’s 6.2%, heightening inflation concerns.

The November core CPI, excluding food and energy, also rose 4.9% year-over-year, the highest since 1991.

Despite the sharp rise in inflation, U.S. Treasury yields fell across the board that day.

The 2-year Treasury yield, sensitive to monetary policy, dropped to as low as 0.62% during the day, and the 10-year Treasury yield also fell to 1.45%. A decline in Treasury yields means an increase in bond prices.

The Chicago Mercantile Exchange (CME) FedWatch tool reflected a 43.1% chance of one rate hike by June next year. The probability of two rate hikes was reflected at 27.5%. The chance of at least one rate hike by May next year was 43.7%, and the chance of two hikes was 13.0%.

Oracle’s stock surged 15% on news that its earnings significantly exceeded expectations. Costco also rose 6% following positive earnings reviews.

The stock of treadmill maker Peloton fell 5% due to Credit Suisse downgrading its investment rating and a negative impact on investor sentiment from a scene in the drama "Sex and the City" where a Peloton user dies.

Tesla’s stock price fell below $1,000 intraday on news that CEO Elon Musk sold more shares, but it closed up 1.3%, maintaining its "Thousand Tesla" status.

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