Fed Effect... US Stock Market Mixed, Treasury Yields and Dollar Down, Bitcoin Up

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Major indices on the New York Stock Exchange closed mixed. Despite strong earnings from big tech companies, this was attributed to the Federal Reserve (Fed) beginning discussions on asset purchases. U.S. Treasury yields fell, and the dollar weakened. Cryptocurrency Bitcoin rose.

On the 28th (local time), the Dow Jones Industrial Average fell 127.59 points (0.36%) to close at 34,930.93, the S&P 500 index dropped 0.82 points (0.02%) to 4,400.64, and the Nasdaq index rose 102.01 points (0.70%) to 14,762.58.

The market focused on the Fed's comments regarding tapering. The Fed stated in its announcement that progress had been made toward tapering goals. It also explained that future meetings would confirm the conditions for progress, signaling the start of tapering discussions.

As a result, major indices on the New York Stock Exchange turned downward and Treasury yields rose slightly, but after Fed Chair Jerome Powell argued that employment indicators still have a long way to go, bond yields fell again. On the New York Stock Exchange, the Nasdaq rose, but the Dow and S&P 500 declined.

Chairman Powell also predicted that the impact of the Delta variant on the economy would be limited, but the Dow, which is focused on economically sensitive stocks, showed weakness.

The U.S. dollar weakened. The dollar index initially rose immediately after the Fed statement was released but ended down 0.17% at 92.275. CNBC analyzed that the Fed’s failure to present a tapering timetable led to the dollar’s weakness.

The dollar had been strong since the June FOMC meeting, reflecting expectations of early rate hikes and tapering.

Meanwhile, Bitcoin showed strength. According to CoinMarketCap, Bitcoin reached $40,400 intraday and is trading at $39,950, up 4.3%.