Silver Prices Plunge 10%
US Treasury Yields Rise...Dollar Strengthens
[Asia Economy New York=Correspondent Baek Jong-min] GameStop's stock price plunged by 60%, falling sharply for two consecutive days. Conversely, major indices on the New York Stock Exchange continued their upward trend, appearing to move away from the turmoil related to GameStop.
On the 2nd (local time), the Dow Jones Industrial Average rose by 475.57 points (1.57%) to close at 30,687.48, the S&P 500 increased by 52.45 points (1.39%) to 3,826.31, and the Nasdaq rose by 209.38 points (1.56%) to finish at 13,612.78.
Following a 30% drop the previous day, GameStop's stock price fell another 60%, closing at $90, breaking below the $100 level. During the trading session, GameStop's price dropped as low as $74. Over two days, the stock price decline reached 72%.
GameStop's market capitalization, which was $24 billion (approximately 26 trillion KRW) on the 27th, shrank to $6.2 billion (about 6.8 trillion KRW) on this day.
AMC, which had rallied alongside GameStop, also plunged by 41%.
Silver, which had surged due to heavy buying by individual investors, also joined the decline with a 10% drop.
As stocks favored by individual investors fell, the likelihood of hedge funds offloading shares due to short-selling pressure decreased, leading major indices to rise for two consecutive days.
Expectations that the Biden administration would push forward a $1.9 trillion economic stimulus package also stimulated the stock market.
President Joe Biden met with Republican senators the day before and on this day met with Democratic lawmakers, stating that the approximately $600 billion stimulus package proposed by Republican senators was too small and reaffirming his stance to maintain the original $1.9 trillion plan.
Although the meeting between President Biden and Republican senators the previous day ended without results, the market is evaluating that the possibility of an agreement is high.
Amid expectations of a large-scale economic stimulus, U.S. Treasury yields turned stronger again. The 10-year Treasury yield reached 1.119% during the session, rising above 1.1% once more. An increase in Treasury yields means a decline in bond prices.
Supported by rising Treasury yields, the value of the dollar also surged. The dollar index, which measures the dollar's value against major currencies, rose to 91.025.
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