[Asia Economy New York=Correspondent Baek Jong-min] Jerome Powell's reappointment as Chair of the U.S. Federal Reserve (Fed) led to a rise in U.S. Treasury yields, causing the New York stock market to close mixed. Cryptocurrencies such as Bitcoin also experienced deeper declines.
On the 22nd (local time), the Dow Jones Industrial Average rose 17.27 points (0.05%) to close at 35,619.25, the S&P 500 index fell 15.02 points (0.32%) to 4,682.94, and the Nasdaq index dropped 202.68 points (1.26%) to 15,854.76.
On that day, major New York stock indices started higher following the announcement of Powell's reappointment before the market opened, but Powell’s strong determination to tackle inflation caused the gains to be given back or reversed into losses.
The Nasdaq index even hit an all-time high early in the session but then reversed downward. The Nasdaq saw a relatively large decline of over 1% as selling pressure intensified near the close.
The Dow also gave back most of its gains after 3 p.m., ending in slightly negative territory.
Investing.com reported that Powell’s reappointment raised concerns about an early rate hike, leading to a sharp decline in tech stocks.
On the same day, President Joe Biden and Powell reiterated their commitment to managing inflation through the Fed.
The 10-year U.S. Treasury yield surged by 0.093 percentage points to 1.629%. Treasury yields had recently fallen amid expectations that Fed Governor Lael Brainard’s appointment as Chair might delay rate hikes, but after Powell’s reappointment, yields returned to previous levels.
Due to the rise in Treasury yields, major tech stocks such as Meta, Alphabet, Amazon, and Microsoft all plunged, except for Apple.
Bank stocks were strong amid rising Treasury yields. Shares of banks like JPMorgan and Morgan Stanley rose more than 2%.
The possibility of an early rate hike also dragged down cryptocurrency prices. Bitcoin was trading at $56,236, down 5.63% compared to 24 hours earlier. Ethereum fell by 6.9%.
CoinDesk noted that cryptocurrency prices had risen on expectations that Fed Governor Brainard, who is more dovish than Powell, would become Chair, but the situation reversed.
Electric vehicle maker Tesla rose 1.7% after CEO Elon Musk announced the upcoming launch of the Model S Plaid in China.
GM rose more than 2% following reports of its acquisition of boat startup Pure Watercraft.
The weakness of recently surged newly listed stocks was also notable.
Unlike Tesla’s rise, competitors Rivian and Lucid plunged 8% and 7.4%, respectively. Gaming company Roblox also saw a relatively large correction of 10.8%.
With booster shots now authorized for all U.S. adults, Moderna surged 7%, and BioNTech jumped 11%.
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