New York Stock Market Falls Amid Focus on Biden Stimulus Size and Rising Interest Rates

[Image source=EPA Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market closed lower as it focused on the scale of economic stimulus measures by President-elect Joe Biden. The rise in U.S. Treasury yields, driven by Federal Reserve (Fed) Chairman Jerome Powell's indication of willingness to tolerate inflation, acted as a negative factor for the market.

On the 14th (local time), the Dow Jones Industrial Average fell 68.95 points (0.22%) to 30,991.52, the S&P 500 index dropped 14.30 points (0.38%) to 3,795.54, and the Nasdaq index declined 16.31 points (0.12%) to 13,112.64 at the close.

The market maintained an upward trend until the afternoon but turned broadly negative ahead of the close.

The expectation that President-elect Biden would propose a nearly $2 trillion stimulus package appears to have pushed up U.S. Treasury yields, leading to the stock market decline.

The measures are reported to include $2,000 cash payments, support for small and medium-sized enterprises, aid to state and local governments, and support for the distribution of COVID-19 vaccines.

Chairman Powell earlier denied the exit strategy raised by Fed members. He emphasized, "The timing for raising interest rates is no time soon," adding, "It is not yet time to discuss the exit." He said, "When the time comes, we will communicate the exit quickly and clearly."

His remarks were interpreted as a stance to tolerate inflation and refrain from raising interest rates.