New York Stock Market Falls on Rising US Treasury Yields... 10-Year Yield Surpasses 4.6%

Giving Back Gains on the 24th... Eyes on Santa Rally
US Continued Unemployment Claims Reach Highest in 3 Years

The three major indices of the U.S. New York Stock Exchange were down in early trading on the 26th (local time). Ahead of the Christmas holiday, the New York Stock Exchange, which had risen by about 1% in the previous trading day, is giving back the gains from the previous day as investor sentiment weakens due to rising U.S. Treasury yields.

As of 10:40 a.m. in the New York stock market, the Dow Jones Industrial Average (Dow Index), which focuses on blue-chip stocks, was down 0.22% from the previous day at 43,201.05. The S&P 500 Index, centered on large-cap stocks, fell 0.18% to 6,029.24, and the Nasdaq Index, focused on technology stocks, was trading down 0.13% at 25,068.

The rise in U.S. Treasury yields weighed on investor sentiment. The Treasury yield jumped ahead of the Treasury Department's planned issuance of $44 billion in 7-year bonds. The U.S. 10-year Treasury yield, a global bond yield benchmark, rose 4 basis points (1bp = 0.01 percentage point) from the previous day to 4.63%, while the 2-year Treasury yield, sensitive to monetary policy, traded up 3 basis points to around 4.36%.

Market attention is focused on whether the Santa Rally, where stock prices rise during the last five trading days of the year and the first two trading days of the new year, will unfold again this year. The New York Stock Exchange, which was closed on Christmas Day, rose collectively on the 24th. The Dow rose 0.91%, while the S&P 500 and Nasdaq jumped 1.1% and 1.35%, respectively, fueling expectations for a Santa Rally. However, with the New York Stock Exchange giving back gains in just one day, optimism and caution about the Santa Rally are divided. Whether the Santa Rally occurs significantly influences investor sentiment in January of the following year.

Michael Jin, Senior Portfolio Manager at UBS Wealth Management, said, "The Santa Rally may still be alive and well, but it could be a tough sled ride," adding, "In a situation where institutional trading volume is absent and individual trading leads, what happens at the end of the year does not necessarily serve as an indicator for January and February."

The number of continuing unemployment claims in the U.S., released on the same day, hit a three-year high, signaling signs of a slowdown in the labor market. According to the U.S. Department of Labor, continuing unemployment claims for the week of December 8-14 totaled 1.91 million, exceeding both the revised previous week's figure (1.864 million) and market expectations (1.88 million). This is the highest level in three years. New unemployment claims for the week of December 15-21 were 219,000, below both the revised previous week's figure (220,000) and expert forecasts (223,000).

Eliza Winger, an economist at Bloomberg Economics, analyzed, "The surge in continuing unemployment claims is due to the prolonged unemployment duration of laid-off workers," adding, "This indicates a slowdown in the labor market."

By stock, Alibaba is up 1.04%. The positive news came from Alibaba International and Shinsegae Group establishing a joint venture in Korea and incorporating Gmarket and AliExpress Korea as subsidiaries to strengthen their e-commerce market presence. Apple is up 0.18%. Wedbush Securities raised Apple's target price from $300 to $325, expecting a surge in iPhone replacement demand driven by Apple's artificial intelligence (AI) service, 'Apple Intelligence.' Nvidia is down 0.9%, and Tesla is down 0.66%.

International oil prices are rising on expectations of additional economic stimulus measures from China and analyses of declining U.S. crude inventories. West Texas Intermediate (WTI) crude oil rose $0.62 (0.9%) from the previous day to $70.72 per barrel, while Brent crude, the global oil price benchmark, increased $0.48 (0.7%) to $74.06 per barrel.