[Asia Economy New York=Correspondent Baek Jong-min] The US New York stock market showed a significant decline centered on tech stocks a day before the full-scale earnings season began.
Employment and inflation indicators highlighted the need for interest rate hikes, and Fed officials consecutively supported rate increases, damaging investor sentiment. In contrast to the stock market decline, safe-haven US Treasury bonds showed strength.
On the 13th (local time), the Dow Jones Industrial Average fell 0.49%, the S&P 500 dropped 1.42%, and the Nasdaq index closed down 2.51%.
The Nasdaq's decline was notable after rebounding from last week's sharp drop. The Nasdaq expanded its losses in the afternoon, leading the overall market downturn.
Despite the US 10-year Treasury yield falling to 1.695%, below 1.7%, there was a strong sell-off in tech stocks.
Tesla dropped as much as 6.75%, Apple fell 1.9%, and Microsoft also declined by 4.23%.
Weekly new unemployment claims exceeded expectations at 230,000, but the Producer Price Index (PPI) reached 9.7%, raising concerns about inflation and increasing the likelihood of the Federal Reserve's rate hike response. The sharp rise in PPI, which reflects wholesale prices, is considered a factor that could lead to retail price increases.
Fed senior officials' consecutive hawkish remarks also dampened investor sentiment.
Lael Brainard, the Fed Vice Chair nominee who was considered a progressive dove, emphasized that curbing inflation is the top priority. Charles Evans, President of the Chicago Fed, also mentioned the need for 2 to 4 rate hikes this year.
Patrick Harker, President of the Philadelphia Fed, anticipated the possibility of four rate hikes within the year. He projected three rate increases this year and argued for a fourth if inflation does not stop. Harker also expected quantitative tightening by the end of this year or next year.
As Treasury yields fell, the dollar value also declined. The dollar index was formed at 98.852, down 0.05% that day.
With tech stocks falling, cryptocurrencies also weakened. Bitcoin traded down 2.76% at $42,799. Ethereum fell 3.28% to $3,274.
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