[New York Stock Market] Rise on Progress in Russia-Ukraine Negotiations... Nasdaq Up 1.84%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices on the U.S. New York Stock Exchange closed higher on the 29th (local time) as geopolitical tensions surrounding Ukraine eased somewhat, despite growing recession warnings due to concerns over the inversion of short- and long-term Treasury yields.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 35,294.19, up 338.30 points (0.97%) from the previous session. The large-cap S&P 500 index rose 56.08 points (1.23%) to 4,631.60, and the tech-heavy Nasdaq index gained 264.73 points (1.84%) to close at 14,619.64. The small-cap Russell 2000 index also recorded a 55.04-point (2.65%) increase to 2,133.10.

Investors closely monitored progress in peace negotiations between Russia and Ukraine, as well as movements in Treasury yields.

By sector, automotive stocks showed the largest gains. Ford and GM closed up 6.48% and 4.61%, respectively. Airline stocks such as American Airlines (4.97%), Delta Air Lines (3.08%), and United Airlines (4.13%) also showed strength. Leading tech stock Tesla rose 0.71% from the previous close. Netflix jumped 3.52%, and Snap surged 4.53%.

FedEx saw nearly a 4% increase after founder and CEO Fred Smith announced he would resign effective June 1. UnitedHealth Group’s stock fell 0.48%, while LHC Group’s shares rose nearly 6% following news that UnitedHealth Group would acquire LHC Group.

In the bond market, concerns and debates about recession intensified due to the inversion between 2-year and 10-year Treasury yields. After a brief inversion between 5-year and 30-year Treasury yields the previous day, as of 4 p.m. on this day, the yield spread between 2-year and 10-year bonds was fluctuating within 5 basis points (1 bp = 0.01 percentage points).

Bloomberg and MarketWatch reported around 1:33 p.m. that the 10-year yield briefly dipped below the 2-year yield, confirming an inversion. However, CNBC reported based on its data that the yield curve had nearly flattened but did not technically invert. Typically, yield curve inversion is interpreted as a precursor to recession, drawing significant investor attention.

However, investors did not show immediate major reactions, noting that it usually takes over a year for a recession to occur after a yield curve inversion. Experts believe the likelihood of an immediate recession in the U.S. economy is low. Mark Happel, Chief Investment Officer at UBS Global Wealth Management, stated, "The U.S. economy can avoid a recession," adding, "Investors should prepare for higher interest rates in line with central bank tightening policies."

Investor sentiment recovered as reports emerged that peace talks between Russia and Ukraine had resumed and Russian military attacks had significantly decreased. Russian Deputy Defense Minister Aleksandr Fomin said after a four-hour fifth round of peace talks in Istanbul, Turkey, "We will immediately significantly reduce military activities in Kyiv and Chernihiv regions." The negotiations are set to resume the following day.

Regarding this, U.S. Secretary of State Antony Blinken said, "We have not seen truly serious signals from Russia regarding the pursuit of peace," and added, "Russia must immediately stop attacks and withdraw its forces."

Oil prices fell amid rising expectations of a ceasefire between Russia and Ukraine. On the New York Mercantile Exchange, May West Texas Intermediate (WTI) crude closed at $104.24 per barrel, down $1.72 (1.6%) from the previous session.

Tom Essaye, founder of The Sevens Report Research, commented, "The market engaged in risk-on trading this morning following reports of progress in ceasefire negotiations between Russia and Ukraine."

Safe-haven gold prices dropped more than 1%. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street’s "fear gauge," fell nearly 4% to the 18 range compared to the previous session.

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