[New York Stock Market] Sharp Rise Across the Board on Rebound Buying... Nasdaq Closes Up 3.82%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] The major indices of the U.S. New York stock market, which had been continuing a sharp decline, all rebounded on Friday the 13th (local time) and closed higher for the first time in a while. However, on a weekly basis, they still recorded losses. The Dow Jones Industrial Average, centered on blue-chip stocks, retreated for as many as seven consecutive weeks.

On that day at the New York Stock Exchange (NYSE), the Dow closed at 32,196.66, up 466.36 points (1.47%) from the previous session. The S&P 500, focused on large-cap stocks, ended at 4,023.89, up 93.81 points (2.39%), and the tech-heavy Nasdaq closed at 11,805.00, rising 434.04 points (3.82%). The Russell 2000, which centers on small-cap stocks, also closed higher at 1,792.66, up 53.28 points (3.06%).

By sector, all 11 sectors within the S&P 500 showed gains. In particular, discretionary consumer goods, technology, and energy-related stocks showed notable strength. American Express (+3.54%), Nike (+4.74%), and Salesforce (+4.05%) jumped more than 3-4%, driving the Dow’s rise.

Technology stocks also showed strength. Tesla closed up 5.71% from the previous session. Semiconductor stocks Nvidia and AMD soared 9.47% and 9.26%, respectively. Netflix (+7.65%), Meta Platforms (+3.86%), Alphabet (+2.84%), and Apple (+3.19%) all rose together. Zoom Video surged 11.62%.

However, Twitter fell nearly 10% after Elon Musk, Tesla’s CEO, mentioned that the acquisition would be temporarily put on hold until more information is obtained about how many fake accounts exist on Twitter. Robinhood surged 24.88% after it was revealed that Sam Bankman-Fried, founder of the cryptocurrency exchange FTX, holds more than a 7% stake in Robinhood. Energy stocks such as Chevron (+1.91%) and ExxonMobil (+2.90%) also rose.

Sam Stovall, Chief Investment Strategist at CFRA, said, "Just as trees don’t grow to the sky, prices don’t fall forever," adding, "There tends to be relief rallies even amid corrections and approaching bear markets, and it seems to be starting today."

On that day, investors focused on inflation concerns, the Federal Reserve’s tightening moves, recession risks, and the impact of the cryptocurrency market. The previous day, Fed Chair Jerome Powell said that achieving a "soft landing" that curbs inflation without causing a recession would be "quite difficult." He also reaffirmed his stance that a 0.5 percentage point rate hike at once would be appropriate.

Along with the New York stock market, Bitcoin and Ethereum prices also rebounded during the day. As the shockwaves from the cryptocurrency Luna and the stablecoin TerraUSD somewhat subsided, Bitcoin recovered to the $30,000 level, and Ethereum regained the $2,000 level. However, both are still down double digits compared to a week ago. The Wall Street Journal (WSJ) reported that concerns over risky assets have caused the global cryptocurrency market capitalization to evaporate by more than $1 trillion (about 1,284 trillion won) in just six months.

New York market experts are also wary of the possibility of further declines. Ryan Detrick of LPL Financial pointed out that the rally does not mean the market has escaped the crisis. He said, "It could go lower once more," noting that bear markets, which are more than 20% below the peak, tend to bottom out between 23% and 25% on average.

Greg Swenson, founding partner of investment bank Brick McAdam, also predicted the possibility of further declines in the U.S. stock market, saying, "(Today’s rebound) could be a rally due to bargain hunting or a 'dead cat bounce.'"

The Dow broke its six consecutive trading days of decline as of the previous day. However, it fell more than 2% just this week, marking the first time since 2001 that it recorded seven consecutive weeks of weekly declines. The S&P 500 slid 2.4% on a weekly basis. The Nasdaq dropped nearly 3%.

In the New York bond market, the yield on the U.S. 10-year Treasury note rose to 2.939%. Bond yields move inversely to prices. The price of gold, a safe haven asset, traded around $1,809 per ounce, down about 0.8% from the previous session. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street’s "fear index," fell more than 9% from the previous session to around 28.8.

Oil prices rose. On the New York Mercantile Exchange, the June West Texas Intermediate (WTI) crude oil price closed at $110.49 per barrel, up $4.36 (4.1%) from the previous session. It rose for three consecutive trading days, marking the highest closing price since March 25.