New York stock market rebounds due to falling government bond yields despite AI investment concerns (comprehensive)

(New York = Yonhap News) Correspondent Soo-jeong Lim = The three major stock indices of the New York Stock Exchange all closed higher on the 15th (local time) thanks to the decline in US Treasury yields.

On this day, on the New York Stock Exchange (NYSE), the Dow Jones Industrial Average ended trading at 52,177.69, up 556.21 points (1.08%) from the previous day.

The Standard & Poor's (S&P) 500 index closed at 7,744.06, up 25.12 points (0.33%) from the previous day, and the Nasdaq Composite Index, centered on technology stocks, closed at 26,713.03, up 20.16 points (0.08%).

On this day, technology stocks showed weakness in the stock market as concerns continued about the enormous investment costs and debt burden of AI-related companies.

AI companies' good performance announcements were not enough to revive investor sentiment.

Antropic's third quarter sales recorded $16.8 billion, a 45% increase from the previous quarter. Taiwan's TSMC, the world's largest foundry (consignment semiconductor manufacturing) company, also announced its highest quarterly net profit ever, but caution continued about AI-related technology stocks.

On the other hand, consumption-related stocks such as Nike (5.21%) and Home Depot (4.31%) led the rise of the Dow as cyclical selling occurred, in which investment funds moved from technology stocks to other industries.

CoreWeave, a cloud computing company that sparked concerns about AI infrastructure investment, fell nearly 10% early in the day and closed 5.9% higher.

NVIDIA CEO Jensen Huang's assessment at the Bloomberg event that day that "CoreWeave's competitiveness is strengthening every day" had an impact on the recovery of investor sentiment.

The sharp drop in U.S. Treasury yields also supported the stock market rebound.

According to electronic trading platform Tradeweb, the yield on 10-year U.S. Treasury bonds fell to 5.086% on this day, recording the largest one-day drop since August 1.

As concerns spread about the debt burden of AI-related companies, investors are turning to U.S. Treasury bonds, a relatively safe asset, which is considered to be the reason for the decline in interest rates.

The US producer price index (PPI) for September, announced on this day, rose 1.3% compared to the previous month, significantly exceeding market expectations, but its impact on the stock market was limited.

Although upward pressure on prices continues, the prevailing view in the market is that the Federal Reserve System (Fed) will freeze the benchmark interest rate at the Federal Open Market Committee (FOMC) meeting at the end of this month.

According to FedWatch of the Chicago Mercantile Exchange (CME), the interest rate futures market on this day reflected the possibility that the Federal Reserve would raise the benchmark interest rate this month at about 27%.