The New York Stock Exchange rose sharply on the first trading day of October on the back of the easing of the interest rate burden.
On the 3rd (local time), the Dow Jones Industrial Average of the New York Stock Exchange finished trading at 29.490.89, up 765.38 points (2.66%) from the previous day.
The Standard & Poor’s (S&P) 500 index rose 92.81 points (2.59%) to 3,678.43, and the tech stock Nasdaq index rose 239.82 points (2.27%) to close at 10,815.44, respectively.
Last month, the New York stock market succeeded in rebounding sharply after the worst month since March 2020, in the early stages of the novel coronavirus (COVID-19) outbreak.
On the previous trading day, the 30th of last month, the Dow and S&P 500 were pushed back to their November 2020 levels.
The driving force behind the reversal was the stabilization of US Treasury yields.
The 10-year U.S. Treasury yield, which once broke through the 4% level last week, fell to the 3.65% level today due to the aggressive tightening stance of the US central bank, the Federal Reserve, and the aftermath of the UK tax cut. It plunged 0.15 percentage points in just one day from 3.802% on the previous trading day.
The decline in 10-year Treasury yields, which are widely used as benchmarks for market interest rates, including mortgages (mortgage loans), supported the sentiment toward risky assets such as stocks.
It is analyzed that the Wall Street prediction that the Fed, which declared that there will be no rate cut until next year, will eventually change its monetary policy amid concerns about an economic downturn, has lowered the US Treasury yield.
Sam Stovall, chief investment strategist at CFRA Research, told CNBC: “The fact that the S&P 500 fell more than 9% in September and the ISM index was weaker than expected, so people are speculating that the Fed may not be as aggressive as it is now. “As a result, government bond yields have fallen and the dollar has weakened,” he said.
Semiconductor stocks, which had the worst slump this year, such as Intel (4.7%), AMD (4.3%), and Nvidia (3.1%), changed the mood, and oil refining stocks were driven by a surge in international oil prices by around 5% due to the announcement of large-scale production cuts in oil producing countries. also went up at once.
However, it is still unclear whether the day’s rebound will lead to a trend rise or just a bear market rally (short-term rebound in a bear market).
The Fed’s ‘third-person’ John Williams, president of the Federal Reserve Bank of New York, said in a speech to the Hispanic Chamber of Commerce in Phoenix that it would take a long time to get inflation back to its 2% target given the underlying inflation pressures. is not over yet,” suggesting that the austerity stance can be maintained for a long time, contrary to market expectations.