New York stock market falls from record high due to high government bond yields (comprehensive)

(New York = Yonhap News) Correspondent Lim Soo-jeong = On the 7th (local time), the three major U.S. New York stock indexes closed lower due to the burden of a surge in government bond interest rates.

On this day, the Dow Jones Industrial Average ended trading at 51,179.87, down 341.41 points (0.66%) from the previous day.

The S&P 500 index closed at 7,801.77, down 17.16 points (0.22%) from the previous day, and the Nasdaq composite index closed at 27,538.69, down 61.20 points (0.22%).

The S&P 500 index and Nasdaq index fell slightly from their all-time highs recorded the previous day.

On this day, long-term interest rates on U.S. Treasury bonds soared to the highest level in more than 20 years, putting pressure on the stock market.

The 10-year U.S. Treasury bond yield exceeded 5.36% during the day, reaching the highest level since 2002. The interest rate on 30-year government bonds also rose to the 5.73% range, also reaching the highest level in 24 years.

Recently, interest rates on U.S. Treasury bonds have continued to be at the highest level in decades due to concerns about increased fiscal spending by the U.S. government amid growing concerns about inflation due to rising international oil prices.

However, interest rates retreated from their intraday highs as strong demand was confirmed in the $39 billion 10-year Treasury bond auction conducted by the U.S. Treasury that day.

Due to strong bidding, the interest rate on 10-year government bonds decreased to around 5.28%. However, the auction interest rate for 10-year government bonds was 5.3%, the highest since 2000.

The lower end of the stock market was supported as U.S. Treasury yields reduced some of the increase and international oil prices also fell.

With the news that the International Energy Agency (IEA) decided to accelerate the release of reserve oil, West Texas Intermediate (WTI) crude oil for November delivery fell $1.16 (1.3%) from the previous level, and Brent crude oil for December delivery ended trading at $100.20 per barrel, down 38 cents (0.38%).

The minutes of the September Federal Open Market Committee (FOMC) meeting of the U.S. Federal Reserve (Fed) released on this day reaffirmed the possibility of further interest rate increases within the year.

According to the minutes, most attendees assessed that it was highly likely that it would be appropriate to raise the base interest rate once more by the end of the year.

However, no signal was provided regarding the specific timing of further interest rate increases.

David Russell, head of global market strategy at Tradestation, said, "Currently, monetary policy is not very restrictive, so further interest rate hikes are likely this year. With inflation above target and most indicators of economic activity strong, price stability is the Fed's dominant responsibility."