[New York Stock Market] Despite Soaring Treasury Yields and Growth Slowdown Outlook... Nasdaq Up 2.15%

[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 19th (local time) as the 10-year Treasury yield surged and investors closely watched earnings reports from key companies. Following the World Bank (WB), the International Monetary Fund (IMF) also downgraded its global economic growth forecast for this year, but optimistic earnings outlooks lifted the market. This week, earnings reports from major companies such as Netflix and Tesla are scheduled.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 499.51 points (1.45%) from the previous close to finish at 34,911.20. The large-cap S&P 500 index gained 70.52 points (1.61%) to close at 4,462.21, while the tech-heavy Nasdaq index rose 287.30 points (2.15%) to end at 13,619.66. The small-cap Russell 2000 index also closed higher by 40.63 points (2.04%) at 2,030.77.

Investors focused on first-quarter corporate earnings reports, the rise in Treasury yields, and the IMF’s global economic growth forecast announcement.

Citizens Financial Group, which reported earnings before the market opened, exceeded first-quarter estimates in both revenue and net income, closing up 6.82% from the previous session. Johnson & Johnson also beat quarterly net income expectations, rising 3.05%. Shares of U.S. toy maker Hasbro surged more than 5% despite disappointing earnings.

Some tech stocks rebounded as well. Netflix, which was scheduled to release earnings right after the market close, ended the regular session up 3.18%. Microsoft (1.70%) and Tesla (2.38%) also showed gains. Roblox’s stock jumped over 2% despite Goldman Sachs downgrading its investment rating from buy to neutral.

Airline stocks strengthened after a Florida federal court ruled to lift the mask mandate on public transportation. American Airlines Group rose 5.66%, United Airlines gained 4.50%, and Delta Air Lines closed up 2.16%.

U.S. Treasury yields surged amid inflation and monetary tightening concerns. As the Federal Reserve (Fed) hinted at the need for a 0.75 percentage point rate hike, the 10-year yield surpassed 2.9%.

The 10-year yield briefly spiked to 2.948% during the day, marking the highest level since December 2018. The 30-year yield remained above 3%, slightly easing but still higher than the previous close. The 2-year yield, sensitive to monetary policy, hovered around 2.59%. Treasury yields and prices move inversely.

This sharp rise in Treasury yields is interpreted as reflecting growing concerns over rising inflation and slowing economic growth, which could accelerate the Fed’s tightening path. James Bullard, President of the Federal Reserve Bank of St. Louis, left open the possibility of a 0.75 percentage point rate hike at once. While he drew a line against hikes higher than 0.50 percentage points at a time, just mentioning the possibility of a 0.75 percentage point increase fueled upward pressure on yields.

Concerns about slowing global economic growth continue. Following the World Bank, the IMF also sharply downgraded its global economic growth forecast for this year from the January revision of 4.4% to 3.6%, considering the impact of Russia’s invasion of Ukraine. This is significantly lower than last year’s growth estimate of 6.1%.

Oil prices fell due to worries about slowing global growth and a stronger dollar. On the New York Mercantile Exchange, May West Texas Intermediate (WTI) crude oil closed at $102.56 per barrel, down $5.65 (5.2%) from the previous session.

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