[New York Stock Market] Nasdaq Rises 2.51% on Rebound Buying... Wall Street Calls It a "Dead Cat Bounce"

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] The US New York stock market, which had plunged due to fears of tightening and recession, closed higher across the board on the first trading day of this week, the 21st (local time). All three major indices recorded gains in the 2% range as a rebound buying spree was confirmed following last week's excessive decline. However, there are also growing views that this rebound may not last long considering recent recession concerns. It is diagnosed as a 'dead cat bounce' (a temporary recovery after a long-term decline).

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 30,530.25, up 641.47 points (2.15%) from the previous session. The S&P 500, centered on large-cap stocks, rose 89.95 points (2.45%) to 3,764.79, and the tech-heavy Nasdaq index closed at 11,069.30, up 270.95 points (2.51%).

This rise is interpreted as a rebound buying following last week's decline. Last week, the S&P 500 fell 5.8%, marking its worst week since March 2020. The Nasdaq and Dow also dropped more than 4%. The New York stock market was closed on Monday, the previous day, due to the federal holiday of Juneteenth (Emancipation Day).

By sector, energy stocks showed a clear upward trend, supported by a sharp rise in oil prices. Diamondback Energy closed up 8.17% from the previous session. ExxonMobil rose 6.26%, Schlumberger jumped 5.95%, and Phillips 66 also gained more than 6%.

Recently plummeting tech stocks also rebounded. Tesla rose 9.35%, regaining the 700-dollar level. Nvidia (+4.32%), Apple (+3.28%), Amazon (+2.32%), and AMD (+2.72%) all showed gains.

Kellogg announced it will split into three divisions, rising nearly 2%. Spirit Airlines closed up 7.94% on news that JetBlue raised its acquisition offer to $33.50 per share.

On the same day, the 10-year Treasury yield in the New York bond market rose to 3.317% at one point during the session. It is currently around 3.307%. A rise in Treasury yields indicates a decline in bond prices.

Investors are closely watching the Federal Reserve's rapid tightening and the resulting recession concerns. Attention is also focused on what Federal Reserve Chairman Jerome Powell will say during his semiannual congressional testimony before the House and Senate on June 22-23. It is expected that Powell will emphasize his commitment to curbing inflation and may even leave open the possibility of a giant step (0.75 percentage point hike) in July.

Recession concerns remain strong. Goldman Sachs recently raised the probability of a US recession next year from 15% to 30%. Michael Wilson, Chief Equity Strategist at Morgan Stanley, warned that "the possibility of a recession is still underpriced in stock prices," and that the S&P 500 could fall to the 3,000 level in the event of a recession. David Sneddon of Credit Suisse mentioned that "fears of global growth slowdown are increasing."

As a result, New York market experts viewed the day's rebound as a temporary phenomenon that may be difficult to sustain. Sam Stovall, Chief Investment Strategist at CFRA Research, said, "The most important question is whether this is simply a rebound or a bottom," but added, "I don't think it's the bottom." Viraj Patel, Global Macro Strategist at Vanda Research, said, "It still looks like a 'dead cat bounce.'"

International oil prices rose. On the New York Mercantile Exchange, July West Texas Intermediate (WTI) crude oil prices closed at $110.65 per barrel, up $1.09 (0.99%) from the previous session.

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