Despite U.S. long-term Treasury yields reaching their highest level in over 22 years, the New York stock market rose on October 6, driven by technology stocks focused on artificial intelligence (AI). This raises questions about whether the positive momentum will carry over to the domestic market. In the NXT premarket, domestic semiconductor stocks like Samsung Electronics and SK Hynix are also seeing gains.
On October 5, the Dow Jones Industrial Average closed up 90.94 points (0.18%) at 51,267.90. The S&P 500 index rose 51.23 points (0.66%) to finish at 7,773.95, while the tech-heavy Nasdaq Composite Index gained 286.45 points (1.05%) to close at 27,477.31, setting a new record high.
AI-related stocks and major tech companies led the market rally. SpaceX surged 7.63%, while Tesla (2.20%), Nvidia (2.12%), Meta Platforms (1.90%), and Microsoft (1.48%) all posted gains. Nvidia also reached an all-time high closing price.
In contrast, the bond market continued to experience selling pressure. The yield on the U.S. 10-year Treasury note climbed to 5.347% during trading, the highest level since April 2002. The 30-year yield also soared to 5.702%. This spike in yields was influenced by the U.S. Institute for Supply Management's (ISM) September Services Purchasing Managers' Index (PMI), which showed the price index rising to its highest level since 2022, reigniting inflation concerns.
Despite the high yields, expectations for earnings growth among AI companies are believed to be supporting investor sentiment. Analysts suggest that the ongoing demand for computing driven by increased AI infrastructure investment is making tech stocks less sensitive to rising interest rates.
In the domestic market, attention is expected to focus on large-cap semiconductor stocks, buoyed by the strength of U.S. tech shares. As of 8:07 a.m. on October 6, Samsung Electronics was up 0.72%, and SK Hynix rose 0.22%. SK Square and Hyundai Motor also showed increases of 0.26% and 0.72%, respectively.
Seo Sang-young, a researcher at Mirae Asset Securities, noted that while the surge in U.S. Treasury yields poses a burden for the domestic market, the strong performance of Asian markets and the resilience of the semiconductor sector are positive indicators. The MSCI Korea ETF rose 3.10% last Friday but fell 0.22% on October 6, while the Philadelphia Semiconductor Index increased by 0.28%.
Seo emphasized the importance of monitoring the rise in long-term Treasury yields, particularly as the 10-year yield exceeds 5.3%. However, he pointed out that the dollar-won exchange rate in the offshore non-deliverable forward (NDF) market was recorded at 1,340.20 won, below the previous Friday's closing price of 1,350.60 won, along with falling international oil prices, which could alleviate some pressure on the domestic market.
Market attention is also focused on the release of the Federal Reserve's minutes from the September Federal Open Market Committee (FOMC) meeting on October 7. Following weaker-than-expected U.S. employment data, concerns about further rate hikes have somewhat eased, leading to speculation about the Fed officials' views on future interest rate paths.
* This article has been translated by AI.
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