In the New York Stock Market, the leading index fell in the aftermath of the resumed rise in US Treasury yields.
There was a big drop in technology stocks.
On the 3rd (US time) on the New York Stock Exchange (NYSE), the Dow Jones 30 Industrial Average closed at 31,270.09, down 121.43 points (0.39%) from the battlefield.
The Standard & Poor’s (S&P) 500 index fell 50.57 points (1.31%) from the battlefield to 3,819.72, while the technology stocks Nasdaq index fell 361.04 points (2.7%) to 12,997.75.
The market watched the US interest rate trend, major economic indicators, and news related to the novel coronavirus infection (Corona 19) vaccine.
As interest rates rose again, anxiety increased.
The 10-year U.S. Treasury bond rate was on the rise, approaching 1.5% at one time during the day.
By the close of the stock market, it traded at the 1.47% level.
It was a relatively large increase from the 1.4% drop the previous day.
It is interpreted that some foreign media reports that the European Central Bank (ECB) will not aggressively respond to rising interest rates have exerted upward pressure.
There are many concerns that if interest rates continue to rise, it will adversely affect the stock price, mainly for high-value technology stocks.
On that day, the stock price of major technology companies fell sharply, with Apple falling by more than 2.4% and Tesla by about 4.84%.
Expectations for the rapid spread of the Corona 19 vaccine provided support for the stock market at the beginning of the market, but it did not alleviate the anxiety caused by rising interest rates.
U.S. President Joe Biden said the vaccine would be available for all American adults by the end of May.
It is about two months ahead of the timetable from the end of July, which was originally planned.
In the United States, the Johnson & Johnson (J&J) vaccine, which requires only one vaccination, was recently approved, increasing the number of available vaccines to three.
President Biden is putting all his efforts into the rapid distribution of vaccines, such as invoking the Defense Goods Production Act to force another pharmaceutical company, Merck, to manufacture J&J vaccines.
The economic resumption movement in front-line states is also intensifying, with Texas saying that it will remove most of the corona 19-related regulations from next week.
However, it is still pointed out that hasty deregulation is dangerous.
New stimulus measures worth $1.9 trillion are also in progress as scheduled.
President Biden and some Democratic senators agreed to narrow the target for cash payments of $1,400.
It was decided to raise the income level of the recipient.
As some conservative lawmakers of the Democratic Party, such as Joe Manchin, were negative about paying cash to unnecessary people, the obstacles to passing the stimulus package were further reduced.
Investors are paying close attention to the remarks of Fed Chairman Jerome Powell scheduled for the next day.
Fed officials have recently made comments that seem to hold back rising interest rates.
Rael Brainerd said yesterday that he was not worried that financial market conditions were still easing, but he was watching the recent bond market movements.
Chicago Federal Reserve Governor Charles Evans said today that the Fed does not need to respond to interest rate levels and is not reviewing it yet, but if necessary, it could use a policy to control the yield curve.
On this day, technology stocks plunged 2.49% by industry.
On the other hand, energy rose 1.43%, and financial stocks rose 0.75%.
Economic indicators released on this day were generally sluggish.
According to the ADP National Employment Report, private sector employment rose 117,000 in February.
Although it maintained the growth trend, it fell short of the 225,000 increase in the market forecast compiled by The Wall Street Journal.
The February Service Industry Purchasing Managers Index (PMI), released by the Supply Management Association (ISM), fell to 55.3 on 58.7 last month.
It fell short of the expert estimate of 58.7.
However, some analyzes have shown that these indicators are a temporary phenomenon caused by an abnormal cold wave.
In addition, the final value (seasonal adjustment) of the service industry purchasing managers’ index (PMI) in February of IHS Markit, an information provider, was 59.8, higher than the previous month’s final value of 58.3.
The previously announced preliminary and market forecast of 58.9 also exceeded.
In the Beige Book of its economic evaluation report, the Fed assessed that economic activity in most regions has expanded slowly.
New York stock market experts predicted that volatility may continue due to interest rate movements.
“High volatility is expected,” said Shima Sha, chief strategist at Principal Global Investor. said.
According to the Chicago Merchandise Exchange (CME) Fed Watch, the FF interest rate futures market reflects the possibility of a 25bp base rate hike in September by 4.1%.
On the Chicago Options Exchange (CBOE), the volatility index (VIX) was 26.67, up 10.66% from the previous trading day.