New York stocks rise on tech stocks… Nasdaq closed 1.9%↑
(New York = Yonhap News) Yonhap Infomax Correspondent Yoon Young-sook = The New York stock market rose all at once as technology stocks rose despite concerns regarding the government bond yield movement.
At the New York Stock Exchange (NYSE) on the 4th (Eastern time), the Dow Jones Industrial Average closed at 34,921.88, up 103.61 points (0.30%) from the previous day.
The Standard & Poor’s (S&P) 500 index rose 36.78 points (0.81%) to 4,582.64, up 36.78 points (0.81%) from the battlefield, and the Nasdaq index, centered on technology stocks, closed at 14,532.55, up 271.05 points (1.90%) from the battlefield.
Investors paid attention to the possibility of further sanctions from the West on Russia, concerns regarding a recession caused by the inversion of government bond yields, and rising oil prices.
The European Union (EU) condemned the allegations of genocide of civilians in the small town of Bucha in Ukraine occupied by the Russian military and said it would discuss new sanctions once morest Russia.
Geopolitical concerns have pushed oil prices back above $100 once more as negotiations between Russia and Ukraine still fail to break through.
As inflation remains high, the prospect of a major rate hike by the Federal Reserve at its May meeting is maintained.
The yield inversion continued as the 2-year government bond yield exceeded the 10-year government bond yield on that day, and the 5-year government bond yield exceeded the 30-year government bond yield. This reflects growing concerns that the economy might make a hard landing due to the Fed’s aggressive tightening.
Analysts also found that stock prices tend to rise in April.
According to MKM Partners, the S&P 500 has risen by an average of 2.41% in April over the past 20 years. In addition, 16 of the last 17 of April showed that the index rose.
US economic indicators were mixed.
The US employment trend index (ETI) for March was 120.56, higher than the previous month’s record of 118.9, reaffirming the robust employment environment.
The Conference Board analyzed that the labor market is expected to return to pre-pandemic levels within the year, saying that the growth of the labor market continues.
The US factory orders in February fell 0.5% from the previous month to $542 billion, the first decline in 10 months.
Among sectors in the S&P 500, consumer discretionary, telecom and technology stocks rose, while utilities, health, finance and consumer staples-related stocks fell.
Tesla shares rose more than 5% in the first quarter as it delivered more than 310,000 vehicles, up 68% from a year earlier.
Twitter shares surged 27% following Tesla CEO Elon Musk announced he had bought a 9.2% stake in the company.
Meta and Netflix all rose more than 4%, and Alphabet’s share price rose more than 2%.
Starbucks stock fell more than 3% as the company announced it was suspending its share buyback program.
Shares of car rental company Hertz rose more than 10% on the news that it will purchase 65,000 Polestar electric vehicles from Sweden.
Analysts in the New York Stock Exchange said that the relief rally appears to have occurred as prices have reflected many of the materials that are hurting tech stocks and growth stocks, such as the possibility of an aggressive rate hike by the Fed.
It also interpreted that stock investors are ignoring the fact that even if there are signs of a recession, it will take a considerable amount of time for an actual recession to occur.
“Tech stocks, including other growth stocks, are currently in some sort of a relief rally, as tech stocks took a hard hit in the first quarter,” CFRA chief investment strategist Sam Stovall told CNBC. “The Nasdaq is clearly leading. Because there isn’t much new news to put pressure on.”
Ryan Detrick, an analyst at LPL Financial, told CNBC that the yield inversion “means that the stopwatches that indicate a potential recession are starting to count”, but that “the good news is that historically, a recession will take up to two years for an actual recession to occur.” That’s what it takes,” he said.
According to the Chicago Mercantile Exchange (CME) FedWatch, there is a 74.4% chance that the Fed will raise the key rate by 50 basis points at its May meeting in the Federal Funds (FF) interest rate futures market.
At the June meeting, the probability of a 50bp rate hike was 64.3% and the probability of a 75bp rate hike was 15.4%.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) fell 1.06 points, or 5.40%, to 18.57.
(End)
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