[New York Stock Market] Waiting for Treasury Auction with Slight Gains... Nasdaq Rises for 7th Consecutive Day

The three major indices of the U.S. New York stock market all closed higher on the 6th (local time), continuing the strong rally from last week. The Nasdaq index rose for the seventh consecutive trading day, marking the longest streak since January.

On this day at the New York Stock Exchange (NYSE), the blue-chip-focused Dow Jones Industrial Average closed at 34.54 points higher than the previous session (up 0.10%) at 34,095.86. The large-cap-focused S&P 500 index rose 7.64 points (up 0.18%) to 4,365.98, and the tech-heavy Nasdaq index closed 40.50 points (up 0.3%) higher at 13,518.78. The Nasdaq index recorded its longest consecutive rise since January, climbing for seven straight trading days through this session.

Investors awaited this week's schedule, including the release of the September trade balance (7th), and the auctions of 10-year (8th) and 30-year (9th) Treasury bonds. On the 8th, public remarks by Jerome Powell, Chair of the U.S. Federal Reserve (Fed), and John Williams, President of the New York Federal Reserve Bank, are also scheduled.

Amid bets on the end of Fed tightening, the New York stock market posted its best weekly performance so far this year last week. According to CME FedWatch, the probability of a December rate hold is 90.4%, down from 95.2% last Friday but still higher than 74.4% the previous week. Additionally, the chance of at least a 25 basis points (1bp = 0.01%p) rate cut at the May meeting next year has risen above 50%.

Adam Sarhan, CEO of 50 Park Investments, explained, "The market is taking a breather to digest the very strong rally from last week," adding that investors are waiting for the next upward momentum from Powell and Fed officials' remarks this week, as well as corporate earnings.

[Image source=Reuters Yonhap News]

Ahead of this week's Treasury auctions, the 10-year U.S. Treasury yield rose 0.09% to 4.65% in the New York bond market. The 30-year yield stood at 4.82%, and the 2-year yield, which is sensitive to monetary policy, hovered around 4.94%.

Investors are also closely monitoring Middle East risks. With civilian deaths exceeding 10,000 due to Israel's attacks on the Gaza Strip amid the war with Hamas, international criticism has increased not only against Israel but also the U.S. The U.S. is intensifying diplomatic pressure on Israel to secure a humanitarian ceasefire.

On this day, the White House announced that U.S. President Joe Biden spoke with Israeli Prime Minister Benjamin Netanyahu to discuss the possibility of a tactical ceasefire. They also exchanged views on efforts to secure the release of hostages held by Hamas. Earlier, on the 3rd, U.S. Secretary of State Antony Blinken proposed a temporary humanitarian ceasefire for hostage release during a meeting with Netanyahu, but Netanyahu stated after the meeting that he "rejects a temporary truce that does not include hostage release."

International oil prices rose as Saudi Arabia and Russia reaffirmed their production cut policies. On the New York Mercantile Exchange, December delivery West Texas Intermediate (WTI) crude oil closed at $80.82 per barrel, up 31 cents (0.39%) from the previous session. Despite the rise, oil prices have fallen 11.95% from their 52-week high and have only increased 56 cents (0.7%) so far this year. Over the past weekend, Saudi Arabia and Russia confirmed their intention to continue oil production cuts and supply reductions through the end of the year.

Meanwhile, some on Wall Street predict that it will be difficult for the stock market to form momentum for further gains. Marco Kolanovic of JP Morgan said, "Focusing on continued rate hikes and slowing growth prospects, stocks will soon lose their appeal to investors." David Donabedian, Chief Investment Officer (CIO) of CIBC Private Wealth, forecasted that "(the U.S. stock market) will experience 'bipolar volatility' for the remainder of the year depending on where long-term interest rates head."