[Good Morning Stock Market] New York Stock Market Rises Despite US Treasury Yield Increase... KOSPI Starts Up 0.3%

On the 26th, the KOSPI is expected to start with a slight rise. It rose despite the increase in U.S. Treasury yields and concerns over a federal government shutdown. Additionally, the valuation attractiveness due to the recent stock price adjustment is expected to be highlighted.

[Image source=Yonhap News]

On the 25th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,006.88, up 43.04 points (0.13%) from the previous trading day. The S&P 500, centered on large-cap stocks, rose 17.38 points (0.4%) to 4,337.44. The Nasdaq, focused on technology stocks, ended the day at 13,271.32, up 59.51 points (0.45%).

Despite a flood of negative factors on that day, the New York stock market closed higher as individual stocks managed to rebound. First, the rise in U.S. Treasury yields put pressure on the stock market. In the New York bond market, the 10-year Treasury yield briefly exceeded 4.5%, marking the highest level since 2007. The 30-year U.S. Treasury yield rose intraday to 4.67%, the highest since 2011.

Moreover, concerns over a U.S. federal government shutdown are growing. To prevent a shutdown, the budget must be passed before October 1, when the 2024 fiscal year begins. However, hardliners within the Republican majority in the House of Representatives, who hold the authority to review the budget bill, are demanding large-scale cuts. With only a few days left until the deadline, the deadlock has yet to be resolved.

However, Amazon rose more than 1.6% compared to the previous session after announcing a $4 billion investment plan in the AI company Anthropic. Nvidia, which has led the AI rally, also jumped nearly 1.5%. Additionally, Apple rose as well, responding to a surge in pre-orders for the iPhone 15, leading the New York stock market to eventually turn upward.

In particular, such news is expected to have a favorable effect on the Korean stock market. Seosangyoung, a researcher at Mirae Asset Securities, said, "The news of a surge in Apple's iPhone pre-orders will have a positive impact on related component stocks," adding, "Amazon's large-scale investment in an AI startup is the same."

Furthermore, as the domestic stock market has been continuously declining recently, the valuation attractiveness is also expected to be highlighted. Han Jiyoung, a researcher at Kiwoom Securities, said, "There are persistent buying incentives due to the valuation attractiveness highlighted by the recent stock price adjustment and the perception of excessive decline," and predicted, "A rebound is expected to start mainly in large-cap stocks and AI-related stocks."