[New York Stock Market] Nasdaq Falls 2.14% Amid Inflation Concerns... Sharp Rise in Treasury Yields

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices on the U.S. New York stock market closed lower on the 14th (local time), as investors watched mixed first-quarter earnings results from major companies and inflation concerns. The possibility of a big rate hike by the central bank, the Federal Reserve (Fed), supported the U.S. 10-year Treasury yield, which surged to 2.83%.

On the 13th (local time) at the New York stock market, the S&P 500 index, centered on large-cap stocks, closed at 4,392.59, down 54.00 points (1.21%) from the previous session. The tech-heavy Nasdaq index ended the day at 13,351.08, down 292.51 points (2.14%). The Dow Jones Industrial Average, composed of blue-chip stocks, recorded 34,451.23, down 113.36 points (0.33%).

On this day, investors focused on corporate first-quarter earnings announcements, economic indicators, and tightening moves through remarks by Fed officials.

By stock, the weakness in tech stocks was prominent due to inflation concerns and the sharp rise in Treasury yields. Microsoft closed down 2.71% from the previous session. Apple fell 3%, and Tesla dropped 3.66%. Nvidia (-4.26%) and AMD (-4.79%) plunged more than 4%.

Twitter’s stock price fell 1.68% following news that Elon Musk, Tesla CEO, plans to acquire Twitter for $43 billion. Musk said at an event that he could not be certain whether the Twitter acquisition plan would succeed, but he has a Plan B if the board rejects it.

The stock prices of banks such as Goldman Sachs, Morgan Stanley, Citigroup, and Wells Fargo, which announced first-quarter earnings on the day, showed mixed results depending on their performance. Goldman Sachs, which reported earnings exceeding market expectations, closed slightly down. Morgan Stanley and Citigroup also showed upward trends, closing up 0.75% and 1.56%, respectively. Wells Fargo fell 4.51% as its operating profit fell short of expectations.

Next week, Dow Jones blue-chip companies including IBM, Johnson & Johnson, American Express, and Verizon, as well as Netflix and Tesla, are scheduled to release earnings.

As the earnings season intensifies, investors appear to be paying closer attention to inflation and recession signals observable in the bond market. Inflation concerns have surged following the release of the March Consumer Price Index (CPI) earlier this week, and the retail sales data released on this day also confirmed the impact of inflation. This is seen as a factor that could accelerate the Fed’s tightening moves.

According to the U.S. Department of Commerce, March retail sales increased by 0.5% compared to the previous month. However, excluding gasoline sales, March retail sales actually decreased by 0.3% from the previous month, confirming that inflation is hitting American households. Core retail sales, excluding automobiles, gasoline, and groceries, rose 0.2% from the previous month. The number of new unemployment claims for the week of April 3-9 was 185,000, slightly up from the previous week.

John Williams, President of the New York Federal Reserve Bank, said in an interview with a broadcaster on the day that the possibility of a 0.5 percentage point rate hike at once, a big step, is a "reasonable option." He confirmed the need for rapid rate hikes to control inflation. On the same day, the European Central Bank (ECB) reaffirmed its existing policy to keep rates unchanged and to end its asset purchase program in the third quarter.

In the bond market, the U.S. 10-year Treasury yield surged to around 2.83% during the day.

Oil prices rose amid concerns that the European Union (EU) may impose sanctions on Russian crude oil. On the New York Mercantile Exchange, May West Texas Intermediate (WTI) crude oil prices closed at $106.95 per barrel, up $2.70 (2.6%) from the previous session. This marks the third consecutive day of gains. This is analyzed as a reaction to reports by the New York Times (NYT) and others that EU officials have begun drafting measures to ban crude oil imports from Russia.

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