Powell "3 Years to Achieve Inflation Target"‥New York Stock Market Rises in Response (Summary)

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The major indices of the New York stock market escaped weakness and rose collectively. Thanks to the support of Federal Reserve (Fed) Chair Jerome Powell, the major indices overcame early session weakness and surged significantly.

On the 24th (local time), the Dow Jones Industrial Average rose 424.51 points (1.35%) to close at 31,961.86, the S&P 500 increased by 44.06 points (1.14%) to 3,925.43, and the Nasdaq rose 132.77 points (0.99%) to finish at 13,597.97.

The Dow, driven by expectations of economic recovery, set a record closing high, and the Nasdaq, which had been weak due to concerns over rising bond yields, also succeeded in reversing its decline.

That morning, the 10-year U.S. Treasury yield rose to 1.42%, putting pressure on the stock market, but Chair Powell’s consecutive congressional testimonies helped limit the rise in bond yields, allowing the market to climb.

The decisive moment was Powell’s remark that it would take more than three years for the Fed to achieve its inflation target. Following Powell’s comments, the 10-year U.S. Treasury yield fell back to around 1.39%.

Although the Nasdaq rose, Apple, Amazon, and Facebook declined. Tesla, which had plunged sharply linked to Bitcoin prices, surged 6.2%, successfully halting its downward trend.

The market flow appeared to shift toward economically sensitive stocks. The strength in airline and petrochemical sectors was representative. Boeing surged 8.1% that day, and oil major Chevron rose about 3.7%. Bank stocks were also strong, with JPMorgan increasing 1.76% supported by rising interest rates.

West Texas Intermediate (WTI) crude oil rose $1.55 (2.5%) per barrel to $63.22, while gold fell $8 (0.4%) per ounce to close at $1,797.90.