[New York Stock Market] 10-Year Treasury Surpasses 3% Ahead of Inflation Data... Closes Slightly Higher

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices of the U.S. New York stock market closed slightly higher on the 6th (local time) after fluctuating throughout the day. Investor sentiment partially revived due to China's easing of COVID-19 lockdown measures, but as the day progressed, cautious trading prevailed ahead of this week's Consumer Price Index (CPI) report. Amid ongoing inflation concerns, the U.S. 10-year Treasury yield surpassed 3% again.

On the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 32,915.78, up 16.08 points (0.05%) from the previous session. The large-cap focused S&P 500 index rose 12.89 points (0.31%) to 4,121.43, and the tech-heavy Nasdaq index ended the day at 12,061.37, up 48.64 points (0.40%). The small-cap Russell 2000 index also closed higher at 1,889.89, gaining 6.83 points (0.36%).

By individual stocks, related shares surged after the Biden administration decided to exempt tariffs on solar panels imported from Thailand, Malaysia, Cambodia, and Vietnam. Enphase Energy closed up 5.41% from the previous session. SolarEdge (+2.86%), SunPower (+2.72%), and Sunrun (+5.94%) also showed strong gains. China's easing of COVID-19 lockdowns led to a rise in casino stocks including Win Resorts (+2.47%).

Amazon rose nearly 2% following its 20-for-1 stock split. Tesla gained 1.60%, and Nvidia increased by 0.35%. Apple, which held its Worldwide Developers Conference (WWDC) and unveiled its self-designed second-generation chips, closed up 0.52%. On the other hand, Twitter fell 1.49% after Elon Musk, Tesla CEO, warned that he might withdraw the Twitter acquisition if information on fake accounts is not provided. Salesforce also slipped more than 1%.

In the New York bond market, the 10-year Treasury yield hit its highest level in about a month. The 10-year yield rose intraday to 3.047% before slightly retreating.

Investors are also closely watching the May CPI report scheduled for release on the 10th. The market expects a slight slowdown in the inflation increase from around 8.2% compared to the previous month. This could confirm that inflation has effectively peaked. Last Friday, U.S. May employment data showed an increase of 390,000 jobs, stronger than market expectations.

If inflation indicators remain high, it is expected that the Federal Reserve's tightening measures will intensify. Conversely, if recent signs of easing inflation are confirmed, investors anticipate that concerns about Fed tightening will ease, positively impacting the stock market.

Marshall Gittler, head of investment research at BDSwiss Holding, noted, "The Fed needs clear evidence that inflation is slowing before considering slowing the pace of rate hikes." Quincy Crosby, chief equity strategist at LPL Financial, said, "The market sees the Fed navigating a painful and difficult path while trying to find a gentle exit."

Investors are also watching whether U.S. tariffs on China will be eased. U.S. Commerce Secretary Gina Raimondo appeared on CNN the previous day and indicated that while there are no plans to adjust tariffs on major industries such as steel and aluminum, tariff reductions on consumer goods used by ordinary households are being considered as a measure to address inflation.

However, Katherine Tai, U.S. Trade Representative (USTR), drew a line on the issue of tariff reductions on China related to inflation response, stating, "It is necessary to acknowledge that inflation is more complex than just tariffs when it comes to measures to ease inflation."

Oil prices briefly surpassed $120 per barrel during the session following news that Saudi Arabia raised crude oil selling prices. However, profit-taking led to a decline, and July West Texas Intermediate (WTI) crude futures on the New York Mercantile Exchange closed down 37 cents (0.31%) at $118.50 per barrel.