Photo = AP
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In the New York Stock Exchange, the leading index rose sharply after overcoming a weakness in the early market.
Jerome Powell, chairman of the Federal Reserve System (Fed), was aided by the easing of concerns over inflation.
On the 24th (US time) on the New York Stock Exchange (NYSE), the Dow Jones 30 Industrial Average closed at 31,961.86, up 424.51 points (1.35%) from the battlefield.
The Standard & Poor’s (S&P) 500 index rose 44.06 points (1.14%) from the battlefield to 3,925.43, while the technology stock-oriented NASDAQ index closed at 13,597.97, up 132.77 points (0.99%).
The Dow index quickly hit an all-time high in terms of intraday and closing prices.
At one time during the week, it exceeded the 32,000 line.
The market watched the US interest rate trend, Chairman Powell’s testimony to the House of Representatives, and news related to the novel coronavirus infection (Corona 19) vaccine.
At the beginning of the market, the stock market was unstable.
In his testimony to the Senate on the previous day, Chairman Powell reaffirmed his policy that he would maintain an easing monetary policy, but this is because US Treasury yields continued to rise.
The 10-year US Treasury bond rate rose to 1.42% at the beginning of the market.
Accordingly, major indexes also showed a decline.
However, as Chairman Powell repressed concerns over inflation and rising interest rates, risky asset investment sentiment quickly revived.
He reaffirmed that employment is still unstable and that inflation is not expected to continue to rise.
Powell reassured investors, in particular, saying it would take more than three years for the Fed’s inflation targets to be met.
As the Fed said it would not tighten its austerity until it achieved significant progress toward its goal, it further strengthened the belief that a easing monetary policy would be maintained over the long term.
In spite of the Fed’s repeated easing remarks, there was still a lot of anxiety in the recent market that if inflation actually started to rise, the timing of austerity would accelerate.
After Chairman Powell’s remarks, the 10-year US Treasury bond yield has also been pushed back to around 1.39%.
The fact that the recent rise in interest rates reflects expectations for strengthening economic recovery also positively influenced the stock market, centering on economic cycle stocks.
On that day, Boeing surged by more than 8.1% and Chevron rose by 3.7%.
Positive news has also been added regarding the Corona 19 vaccine.
Researchers from the US Food and Drug Administration (FDA) released a report supporting approval for emergency use of the Johnson & Johnson (J&J) vaccine.
The FDA’s Expert Committee is scheduled to hold a meeting to evaluate the J&J vaccine on the 26th (Friday).
If experts recommend urgent use approval, FDA is expected to give final approval soon.
The J&J vaccine only needs to be given once and can be stored at room temperature, which is expected to further increase the vaccination rate.
There is a growing expectation that the economy could soon normalize due to the expansion of vaccine distribution, such as the UK’s announcement of a plan to ease the blockade.
By stock on that day, Tesla’s share price rebounded by about 6.2%.
Gamestop’s share price soared more than 103% due to the concentration of last-minute purchases.
By industry, energy surged 3.65%, and financial stocks rose 2.01%.
Technology shares also rose 1.51%.
The economic indicators released that day were good.
The U.S. Department of Commerce announced that in January, sales of new homes increased 4.3% from the previous month to an annual rate of 923,000 units (seasonally adjusted).
The Wall Street Journal’s (WSJ)’s estimate was up 0.9% to 850,000 units.
New York stock market experts diagnosed that Powell’s comments could alleviate concerns about rising interest rates.
“I feel relieved that interest rates and inflation will not skyrocket as expected,” said Sean Snyder, head of investment strategy at Citi Wells Management.
On the Chicago Options Exchange (CBOE), the volatility index (VIX) fell 7.66% from the previous trading day to 21.34.
/yunhap news
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