[New York Stock Market] Gains Led by Tech Stocks... Nasdaq Up 1.9%

[Image source=Reuters News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices on the U.S. New York stock market closed higher on the 4th (local time), buoyed by a rebound in tech stocks. Despite concerns over additional Western sanctions against Russia and fears of a recession triggered by the inverted yield curve, investors flocked to buy tech stocks, pushing the Nasdaq Composite Index up nearly 2%.

On that day in New York City, the tech-heavy Nasdaq index closed at 14,532.55, up 271.05 points (1.90%) from the previous session. The large-cap S&P 500 index rose 36.78 points (0.81%) to 4,582.64, while the Dow Jones Industrial Average closed at 34,921.88, up 103.61 points (0.30%).

By individual stocks, the strength of tech stocks, which had plunged in the first quarter, was prominent. Twitter’s stock surged 27% from the previous close following news that Tesla CEO Elon Musk had purchased shares. Tesla’s stock also closed up 5.61% after reports that vehicle deliveries in the first quarter increased 68% year-over-year.

Apple, Amazon, Alphabet, and Nvidia also rose more than 2%. Chinese tech stocks listed in New York, such as Alibaba, also showed a rally. Sam Stovall, Chief Investment Strategist at CFRA, said, "Tech stocks, which were hit hard in the first quarter, staged a kind of relief rally at this point." However, Starbucks slid nearly 4% after announcing the suspension of its share repurchase program.

Investors monitored the Ukraine situation, watching for additional Western sanctions against Russia and the resulting movements in oil prices. International oil prices rose amid increased likelihood of sanctions against Russia. On the New York Mercantile Exchange, May West Texas Intermediate (WTI) crude oil prices rose $4.01 (4%) to $103.28 per barrel compared to the previous session.

Earlier, evidence of civilian massacres in Bucha, Ukraine, has strengthened speculation that the European Union (EU), following the U.S. and the U.K., will impose energy sanctions. Olaf Scholz, the German Chancellor, who had been relatively lukewarm about energy sanctions, mentioned that Western countries would soon announce additional sanctions.

With oil prices rising more than 4%, inflation concerns persisted. There are also growing expectations that the Federal Reserve (Fed) will raise the benchmark interest rate sharply at its May meeting. Jamie Dimon, Chairman of JPMorgan Chase, the largest U.S. bank, warned in his annual shareholder letter that the U.S. economy faces unprecedented risks requiring preparation for dramatic upheavals. He also suggested the possibility of a "big step" rate hike of 0.5 percentage points at once, indicating the Fed’s rate increase might be larger than expected.

Additionally, investors paid close attention to Treasury yield movements ahead of the release of the Federal Open Market Committee (FOMC) meeting minutes scheduled for this week. Currently, the yield on the 2-year U.S. Treasury note stands at 2.424%, surpassing the 10-year yield of 2.415%. The 5-year yield is also higher at 2.554% compared to the 30-year yield of 2.475%. Typically, such an inverted yield curve is interpreted as a precursor to a recession.

In a memo sent to clients on the same day, UBS advised, "The stock and bond markets continue to send conflicting signals about the economic outlook," and cautioned, "Investors should be careful not to overinterpret these signals in either direction."

There is also analysis suggesting that April is traditionally a strong month for the stock market. According to MKM Partners, the S&P 500 index has risen an average of 2.41% in April over the past 20 years. CNBC added that the index showed gains in 16 out of the last 17 Aprils.

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