[New York Stock Market] Slightly Higher Ahead of FOMC Results... 10-Year Bond Yield Surpasses 3%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] On the 3rd (local time), the U.S. New York stock market closed slightly higher as investors focused on the results of the Federal Open Market Committee (FOMC) regular meeting to be released the next day. The U.S. 10-year Treasury yield once again surpassed the 3% level during the session.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,128.79, up 67.29 points (0.20%) from the previous session. The large-cap S&P 500 index rose 20.10 points (0.48%) to 4,175.48, and the tech-heavy Nasdaq index gained 27.74 points (0.22%) to close at 12,563.76. The small-cap Russell 2000 index also recorded a 15.94 point (0.85%) increase to 1,898.86.

By sector, energy stocks showed strength. Devon Energy closed up 10.16% from the previous session. ExxonMobil (+2.06%), Marathon Oil (+5.21%), Schlumberger (+2.66%), Chevron (+1.72%), and Occidental Petroleum (+1.61%) also showed gains. Financial stocks such as JPMorgan and Morgan Stanley rose more than 2% each, continuing the upward trend.

Pfizer rose 1.97% after reporting earnings that exceeded market expectations. In contrast, Check dropped more than 30% despite better-than-expected earnings, as it lowered its future guidance. Expedia and Hilton also fell 14.02% and 4.15%, respectively, following their quarterly earnings announcements.

Investors are closely watching the FOMC regular meeting results starting today, Treasury yield movements, and corporate earnings. The Federal Reserve (Fed), the central bank, is widely expected to implement a so-called 'big step' by raising the benchmark interest rate by 0.5 percentage points at the May FOMC meeting held through the 4th, and to concretize quantitative tightening measures such as balance sheet reduction. This will be the Fed's first big step since 2000.

Market attention is already focused on the June Fed meeting. There is also speculation about a 'giant step' of a 0.75% rate hike. According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds (FF) futures market reflects a 99.8% probability of a 0.5 percentage point rate hike this month. The market also sees over a 95% chance that the Fed will raise rates by 0.75 percentage points at the June meeting.

Market experts are paying attention to how much and how quickly the Fed will raise rates. Bloomberg Economics expects the Fed to implement three consecutive big steps from this month's FOMC through July. Quill Intelligence CEO DeMatino Booth said, "The market has already priced in a 0.5 percentage point hike at the May meeting," adding, "The focus will shift to how many more 0.5 percentage point hikes will occur in the remaining period."

In the bond market, the U.S. 10-year Treasury yield surpassed 3% during the session on the 2nd and again briefly exceeded 3% on this day. The 10-year yield hit 3.01% intraday and is currently trading around 2.98%. If the Fed announces quantitative tightening at this month's meeting, long-term yields are expected to face further upward pressure.

Corporate quarterly earnings announcements continue. After the market closes, Airbnb, AMD, Lyft, and Starbucks are scheduled to release their earnings.

The March factory orders data released on this day showed a 2.2% increase from the previous month, exceeding expectations. Job openings increased by 205,000 from the previous month to 11.55 million, the highest level since the related statistics began and surpassing experts' forecast of 11.2 million. The number of quits in March was 4.54 million, up 152,000 from the previous month, also the highest on record. As U.S. companies' labor shortages peaked last month, there are forecasts that this will put further upward pressure on already rising workers' wages, fueling inflation concerns.

Oil prices fell amid ongoing prospects of an EU ban on Russian crude oil imports and concerns about weakening oil demand. At the New York Mercantile Exchange, June West Texas Intermediate (WTI) crude oil prices closed at $102.41 per barrel, down $2.76 (2.6%) from the previous session.

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