[New York Stock Market] Rally on Powell's Mention of '0.25%p Increase'... Nasdaq Up 1.62%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Amid Russia's ongoing invasion of Ukraine, the New York stock market rebounded sharply on the 2nd (local time). As Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), expressed a cautious stance on tightening and distanced himself from a 'big step' (0.50 percentage point interest rate hike), the Dow Jones Industrial Average, composed of blue-chip stocks, showed a broad rally with nearly all components rising. International oil prices and government bond yields also surged.

On this day at the New York Stock Exchange (NYSE), the Dow closed at 33,891.35, up 596.40 points (1.79%) from the previous session. The large-cap S&P 500 index rose 80.28 points (1.86%) to 4,386.54, and the tech-heavy Nasdaq index gained 219.56 points (1.62%) to close at 13,752.02. The small-cap Russell 2000 index also increased by 50.37 points (2.51%) to 2,058.87.

Among individual stocks, the strength of the blue-chip stocks comprising the Dow was evident. Caterpillar's stock price rose more than 5% compared to the previous session. Intel increased by 4.4%, and Goldman Sachs closed up 2.8%.

Angelo Koukapas, an investment strategist at Edward Jones, said, "There is some relief as U.S. economic data continues to remain robust," adding, "Although uncertainty persists, domestic fundamentals remain solid." There are also observations that a support level, which no longer falls after already dropping about 10% from the previous high, has been confirmed.

With oil prices hitting their highest level since 2011, Chevron's stock rose 3.03%. Technology stocks also showed gains. Tesla, a leading tech stock, rose 1.82% to close. Apple increased by 2.07%, Nvidia by 3.29%. Microsoft (1.85%), Meta Platforms (2.42%), and Amazon.com (0.64%) also showed upward trends.

Ford surged more than 8% after announcing the spin-off of its electric vehicle division and internal combustion engine vehicle division. Nordstrom soared more than 37% on better-than-expected earnings. On the other hand, First Solar plunged more than 8% after announcing weak earnings guidance.

Investors on this day focused on the clashes between Russia and Ukraine, the surge in oil prices, and Chairman Powell's congressional testimony. Powell appeared before the House Financial Services Committee hearing and said, "I think it is appropriate to raise the target range for the federal funds rate at this month's Federal Open Market Committee (FOMC)," mentioning a specific increase of '0.25 percentage points.' This confirmed a cautious tightening policy, drawing a line against the 'big step' raised by some.

Powell stated, "The short-term impact of Russia's invasion of Ukraine, the ongoing war, sanctions, and what will happen next on the U.S. economy remains very uncertain." Regarding policy operations, he emphasized watching the data, saying, "The economy can change in unexpected ways."

Government bond yields rebounded unusually sharply. The U.S. 10-year Treasury yield rose from the previous day's 1.7% range to 1.89% on this day. The 2-year yield, sensitive to monetary policy, jumped to the 1.5% range. The market also noted that Wells Fargo's stock, a bank stock, rose more than 4% along with bond yields. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street's 'fear index,' fell more than 7% from the previous session but still remained at a high level in the 30s.

As Russia's invasion of Ukraine intensified, major oil-producing countries decided on a 'slight' increase in production, pushing international oil prices above $110 per barrel on this day. West Texas Intermediate (WTI) crude oil for April delivery on the New York Mercantile Exchange (NYMEX) closed at $110.60 per barrel, up 7% ($7.19) from the previous day. This is the highest closing price in about 11 years since May 2011. During the session, WTI even reached $112.51.

On this day, the Organization of the Petroleum Exporting Countries (OPEC) and Russia-led coalition 'OPEC Plus' (OPEC+) decided to increase April oil production by only 400,000 barrels per day compared to March. Despite concerns about supply shortages, the scale of the increase was modest.

Russian forces continued attacks centered on major Ukrainian cities on this day. Reports also emerged that the southern city of Kherson, near the Crimean Peninsula annexed by Russia, was occupied by Russian troops.

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