[New York Stock Market] Rising Across the Board on Falling Treasury Yields...Nasdaq Up 2.25%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices of the U.S. New York Stock Exchange closed higher on the 25th (local time) as Treasury yields fell amid the big tech earnings season. This was a result of weak U.S. economic indicators, including a somewhat frozen housing market and consumer sentiment.

On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 31,836.74, up 337.12 points (1.07%) from the previous session. The S&P 500, centered on large-cap stocks, rose 61.77 points (1.63%) to 3,859.11, and the tech-heavy Nasdaq index closed at 11,199.12, up 246.50 points (2.25%).

Among individual stocks, big tech companies showed notable strength during the earnings season. Microsoft and Alphabet closed up 1.38% and 1.91%, respectively, ahead of their earnings releases after the market close. Tesla rose 5.29%, and Nvidia increased by 5.25%. Chinese stocks, which had fallen the previous day amid concerns over the launch of Xi Jinping’s third term, also rebounded. Nio rose 12.49%, and Didi Global increased by 10.81%. Eleven of the eleven S&P 500 sectors, excluding energy, closed higher.

Additionally, General Motors (GM) and Coca-Cola jumped 3.61% and 2.41%, respectively, on better-than-expected earnings. General Electric (GE) slightly declined despite better-than-expected earnings due to announcements of decreased demand for wind turbines. Xerox fell 14% as its earnings per share fell far short of expectations.

Investors closely watched corporate earnings announcements, Treasury yield movements, and economic indicators on this day. While third-quarter corporate earnings generally exceeded expectations, Microsoft and Google’s Alphabet are scheduled to release earnings after the market close. On the 26th, Meta, Facebook’s parent company, will announce earnings, followed by Amazon and Apple on the 27th. Considering the market capitalization of these companies, stock market movements are expected to be driven by big tech earnings for the time being.

Treasury yields fell as expectations for aggressive tightening eased somewhat due to weak economic data ahead of the Federal Reserve’s rate hike decision. The 10-year Treasury yield dropped to 4.10% in the New York bond market. The 2-year yield, sensitive to monetary policy, also fell to 4.46%. Cliff Hodges, Chief Investment Officer at Cornerstone Wealth, interpreted, "The movement of Treasury yields and indices signals that investors are flocking to expectations of Fed easing."

The economic indicators released on this day confirmed cooling signals in the housing market and consumer sentiment.

According to S&P Dow Jones Indices, a global market index provider, the August S&P CoreLogic Case-Shiller Home Price Index (seasonally adjusted), which measures average home price trends in major U.S. cities, fell 0.9% from the previous month. This marks the second consecutive month of declining home prices following a downturn in July, the first in 10 years. Although home prices continued to rise year-over-year, the pace slowed. Compared to a year ago, August home prices rose 13%, down from 15.6% in July.

The Conference Board’s October Consumer Confidence Index, released the same day, fell to 102.5 from 107.8 in the previous month, below market expectations. This suggests worsening consumer sentiment amid growing concerns about economic slowdown.

Due to weak economic data, the dollar also weakened. The Dollar Index, which measures the value of the U.S. dollar against six major currencies, traded near 110.951, down about 0.8% from the previous day.

Experts have also issued warnings about the recent rally in the New York stock market. Nick Baron, Senior Investment Specialist at Brainvest, pointed out, "The current rally may be fake." Some evaluations suggest it could be a rebound from an oversold condition in a bear market. Johnny Zidins of Krax Market noted, "The fastest and largest rallies occur in bear markets."

Due to the weaker dollar, oil prices rose. On the New York Mercantile Exchange, December West Texas Intermediate (WTI) crude oil prices closed at $85.32 per barrel, up 74 cents (0.87%) from the previous session.

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