US Treasury Yields Approaching 2%... Nasdaq Closes Down 1.3%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The US New York stock market failed to continue the previous day's upward trend and closed mixed. This was due to the sharp rise in Treasury yields, which weighed on growth stocks.

On the 4th (local time), the Dow Jones Industrial Average closed down 0.59% at 36,799.65, the S&P 500 fell 0.06% to 4,793.54, and the Nasdaq dropped 1.33% to 15,622.72.

Although the Dow continued its strong performance, hitting an all-time high, technology stocks fell sharply, causing the S&P 500 and Nasdaq to close in the red. The sharp rise in Treasury yields over two consecutive days also notably boosted bank stocks. JPMorgan Chase, the largest US bank, rose by 3.7%.

As of the afternoon, the US 10-year Treasury yield stood at 1.64 percentage points. During the day, the 10-year yield surged to as high as 1.68%, showing a marked upward trend. CNBC reported that the 10-year yield experienced its largest increase in the first trading day of the new year in 20 years. A rise in Treasury yields means a decline in Treasury prices.

The rise in Treasury yields is interpreted as reflecting the Federal Reserve's (Fed) interest rate hikes. Ian Linjun, head of US bond strategy at BMO Capital Markets, forecasted, "The 10-year yield is likely to rise above 2% during the first quarter."

Forbert Pips, director at Pershing Capital Management, explained, "Defensive stocks and value stocks currently have an advantage over growth stocks."

Tesla, which surged 13% the previous day, fell 4.4% on this day. Apple, which had reached a market capitalization of $3 trillion, dropped 1.1%. Nvidia, which had led the rise in semiconductor stocks, declined 2.7%.

On this day, the S&P 500 value stock index rose 1.1%, while the S&P 500 growth stock index fell 1.4%, showing a contrast.

Automaker Ford surged 11% after announcing it would expand production of the F-150 electric pickup truck to 150,000 units and resume accepting new orders.

Benefiting from the rise in oil prices, Occidental Petroleum rose 7.4%, and Coterra Energy increased 6.9%.

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