[New York Stock Market] Four Consecutive Days of Bull Market... Nasdaq Rises 8% Over the Week

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[Asia Economy New York=Special Correspondent Joselgina] Major indices of the U.S. New York stock market continued their upward trend on the last trading day of the week, the 19th (local time), as investors closely watched the Federal Reserve's (Fed) tightening moves and the direction of Ukraine negotiations. The tech-heavy Nasdaq index surged more than 8% over the week, marking the largest weekly gain in 1 year and 4 months.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,754.93, up 274.17 points (0.80%) from the previous session. The large-cap S&P 500 index rose 51.45 points (1.17%) to 4,463.12, while the tech-focused Nasdaq index gained 279.06 points (2.05%) to close at 13,893.84. The small-cap Russell 2000 index also recorded a 21.12 point (1.02%) increase to 2,086.14.

Following the Federal Open Market Committee (FOMC) regular meeting, uncertainty surrounding the Fed's tightening path has somewhat eased, allowing the market rally to continue. The Fed's strong assessment of the U.S. economy's fundamentals has revived investor sentiment. The shockwaves from the Ukraine crisis on the stock market have also significantly softened.

The S&P 500 index rose more than 6% over the past five trading days, while the Nasdaq's weekly gain reached the 8% range. CNBC reported that these are the highest levels since February 2021 and November 2020, respectively. On this day, the Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street's "fear gauge," fell more than 7% to the 23 level compared to the previous session.

Among individual stocks, tech stocks showed notable strength. Tesla closed up 3.88% from the previous session. Salesforce and Apple rose 3.99% and 2.09%, respectively. Nvidia's stock price surged nearly 7%. Paycom also ended the day up 4.64%.

Moderna's shares rose more than 6% after the FDA approved booster shots for those aged 18 and older. Boeing closed up 1.39% following reports that it is negotiating with Delta.

Investors focused on remarks related to the Fed's rate hike decision earlier. James Bullard, President of the Federal Reserve Bank of St. Louis and a prominent hawk (favoring monetary tightening), stated in a release that he prefers raising the benchmark interest rate to above 3% within this year. This significantly exceeds the rate projections shown in the dot plot released after the FOMC meeting on the 16th.

Fed Governor Christopher Waller also mentioned in an interview that if inflation becomes severe, a so-called big step rate hike of 0.50 percentage points might be necessary. This big step has been advocated by Bullard, who voted against the FOMC decision this time. As hawkish comments continue to pour in, there are expectations that the Fed may adopt a more aggressive tightening stance at the May FOMC meeting.

According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds (FF) futures market now prices in over a 40% chance of a 0.50 percentage point rate hike by the Fed in May, a clear increase from the 30% range the previous day.

In the bond market, the yield on the U.S. 10-year Treasury note slightly declined to the 2.14% range compared to the previous session.

Meanwhile, investors are also closely monitoring the latest news surrounding the Ukraine crisis.

Reports emerged that a missile struck an aircraft maintenance center on the outskirts of Lviv in western Ukraine. The Russian government stated that it has significantly narrowed differences regarding Ukraine's neutrality and its abandonment of NATO membership. However, Russian President Vladimir Putin claimed in a phone call with German Chancellor Olaf Scholz that Ukraine is delaying peace negotiations.

U.S. President Joe Biden spoke for 1 hour and 50 minutes with Chinese President Xi Jinping to discuss bilateral issues, including Russia's invasion of Ukraine.

The White House explained in a press release after the call that "the conversation focused on Russia's unjustified invasion." It was confirmed that President Biden strongly warned about the consequences if China supports Russia's war.

Jim Paulsen, Chief Investment Strategist at Royholt Group, pointed out the uncertainty of the Ukraine situation, saying, "We have no idea where this is going." However, he added, "Over time, the market is showing improvement," and assessed that "the economic impact will not be as large as it appears on the surface." The strong performance of the New York stock market this week is interpreted as reflecting such investor judgments.

The immediate default risk of Russia has also been alleviated for now. Russia reportedly paid $117 million in interest in dollars on two dollar-denominated bonds maturing this week. The Russian central bank decided to maintain the benchmark interest rate at 20% on this day.

As uncertainty eased, gold futures, a representative safe-haven asset, also showed a downward trend. Gold futures fell 1.17% from the previous session to the $1,920 range per ounce.

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