US Treasury Yields Face Crucial Powell Remarks Next Week... New York Stock Market Closes Mixed

Possibility of Major Fluctuations Again Following Powell's Remarks
Dollar and Gold Also Experience Consecutive Sharp Price Swings

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The US Treasury yields, which had surged the day before, fell sharply, leading to a decline in the Dow Jones Industrial Average and a rise in the Nasdaq index. Although the upward trend in Treasury yields that shook the market throughout the week has somewhat eased, analysts say the possibility of turmoil remains next week.

On the 26th (local time), the Dow Jones Industrial Average closed at 30,932.37, down 469.64 points (1.5%) from the previous session, the S&P 500 index fell 18.19 points (0.48%) to 3,811.15, and the Nasdaq index rose 72.91 points (0.56%) to 13,192.34.

On a weekly basis, the Dow fell 1.8%, the S&P 500 dropped 2.5%, and the Nasdaq declined 4.9%.

The 10-year US Treasury yield fluctuated significantly, rising to 1.558% in the morning before falling to around 1.4%, but ultimately showed a sharp decline compared to the previous day.

Key indicators such as inflation limited the rise in yields. The Department of Commerce announced that January's Personal Consumption Expenditures (PCE) increased by 2.4% (seasonally adjusted) compared to the previous month, falling short of the 2.5% increase expected by experts surveyed by Dow Jones. The core PCE price index, excluding food and energy, also remained at the market-expected level of a 1.5% increase.

Market experts analyze that Treasury yields could show significant volatility depending on the speech by Federal Reserve Chairman Jerome Powell scheduled for next Thursday.

Peter Boockvar, Chief Investment Officer at Bleakley Advisory Group, predicted, "If Chairman Powell takes a dovish stance, yields could soar even higher."

Energy-related stocks, including those affected by the sharp drop in international oil prices, underperformed relatively, reflecting sensitivity to the economy. Tesla, which had fallen 8% the day before, remained nearly flat on this day. Apple saw only a slight increase. This shows that caution still prevails in the market.

The April West Texas Intermediate (WTI) crude oil price closed at $61.50 per barrel, plunging $2.03 (3.2%) amid rising concerns over increased production.

Despite the US House of Representatives expected to pass a $1.9 trillion stimulus package on the same day, the dollar, which had recently weakened but surged alongside the sharp rise in Treasury yields, continued its upward trend. The dollar index, which reflects the dollar's value against major currencies, rose 0.9% to 90.947.

The combined effect of the strong dollar and rising US Treasury yields caused gold prices to fall as much as 3% during the session, dropping to the $1,730 level. This is the lowest level since June last year.