New York Stock Market Rises Early Amid Focus on Powell's Speech and Treasury Yields

The three major indices of the U.S. New York stock market showed slight gains in early trading on the 8th (local time), as investors monitored remarks from Federal Reserve (Fed) Chair Jerome Powell and other officials, as well as Treasury auctions and movements in Treasury yields.

At around 10:08 a.m. at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average, which focuses on blue-chip stocks, was trading about 0.15% higher at the 34,205 level compared to the previous close. The large-cap S&P 500 index was up 0.11% at 4,383, and the tech-heavy Nasdaq index was up 0.06% at 13,647.

Currently, eight of the 11 sectors in the S&P 500 are rising, excluding utilities, telecommunications, and consumer staples. Roblox surged more than 17% from the previous close, buoyed by better-than-expected third-quarter earnings and daily active user numbers. Rivian, after raising its annual production target to 54,000 units, showed gains before the open but was down about 1% during regular trading. Warner Bros. Discovery fell nearly 15% due to disappointing earnings. Robinhood dropped over 13% amid a sharp decline in trading volume. Lyft was trading slightly lower ahead of its earnings report after the market close.

[Image source=Getty Images Yonhap News]

Investors are closely watching Fed officials’ remarks, Treasury auctions, and Treasury yield movements amid ongoing corporate earnings announcements. The Nasdaq has risen for eight consecutive trading days, and the S&P 500 for seven, marking the longest winning streak since November 2021. CNBC attributed this rally to strong corporate earnings. Approximately 88% of S&P 500 companies that have reported so far have beaten estimates.

Ken Mahoney, CEO of Mahoney Asset Management, said, "All the big tech companies have already reported earnings. At this point, there probably won’t be too many surprises." He added that the Fed might be operating in a "Goldilocks environment" that is neither too hot nor too cold for raising rates, suggesting a year-end rally could be possible.

Chairman Powell said in his opening remarks at a conference that the Fed must be willing to think beyond traditional mathematical simulations when forecasting the economy. However, he did not comment on interest rates or economic outlook at this event. He is expected to express his views on monetary policy challenges during a panel discussion at the research conference the following day. Matt Maley, chief market strategist at Miller Tabak + Co., said, "It would be interesting if he comments on recent long-term yield movements," adding, "If his tone is somewhat more hawkish than before, it could act as a catalyst."

John Williams, president of the New York Federal Reserve Bank and considered the Fed’s third-ranking official, and Vice Chair Philip Jefferson are also scheduled to speak today. Tomorrow, in addition to Chair Powell, Raphael Bostic, president of the Atlanta Fed, and Thomas Barkin, president of the Richmond Fed, are expected to deliver speeches.

The market consensus favors a rate hold in December following November. According to the CME FedWatch tool, the federal funds futures market currently prices in over a 90% chance that the Fed will keep rates steady at 5.25%?5.5% at the next meeting. The probability of a "baby step" hike is around 9%. This suggests that despite expectations of prolonged high rates, an immediate rate hike is unlikely.

In the New York bond market today, the benchmark 10-year U.S. Treasury yield fell to around 4.56%. The 2-year yield, which is sensitive to monetary policy, was trading near 4.93%. The Treasury Department plans to auction $40 billion of 10-year notes today. This auction is attracting Wall Street’s attention as a gauge of market sentiment following the recent Treasury yield rally. Tom Essaye, founder of The Sevens Report newsletter and a former Merrill Lynch trader, said, "If yields start rising after the auction, it could pose a strong headwind for the stock market."

The dollar index, which measures the value of the U.S. dollar against six major currencies, was trading above 105.6, up more than 0.1%. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street’s "fear gauge," fell more than 1% to 14.6. Additionally, the weekly average 30-year fixed mortgage rate released today was 7.61%, down from 7.86% last week. CNBC noted this as the largest weekly drop in over a year.

European stock markets are rising. Germany’s DAX index gained 0.74%, the UK’s FTSE rose 0.21%, and France’s CAC index increased 1.02%.