On the 6th (Korean time), the three major indices of the New York Stock Market closed higher in unison. Although a surge in U.S. Treasury yields heightened market concerns, strength in major artificial intelligence (AI)-related technology stocks and a significantly reduced possibility of a October benchmark rate hike by the U.S. Federal Reserve (Fed) supported investor sentiment.

By index, the Dow Jones Industrial Average closed at 51,267.90, up 90.94 points (0.18%) from the previous trading day. The Standard & Poor's (S&P) 500 index rose 51.23 points (0.66%) to 7,773.95, and the Nasdaq Composite closed at 27,477.31, up 286.45 points (1.05%).

The Nasdaq surpassed its previous record closing high set on September 22 to set a new all-time high, while the S&P 500 also closed in on its existing record.

■ AI and Major Tech Stocks Lead the Rally

AI and major technology stocks were at the center of the market's rise. Nvidia climbed about 2.1% to set another record closing high, while Microsoft rose roughly 1.5%, and Meta Platforms and Tesla each gained about 2%. Expectations for earnings growth at AI-related companies appear to have partially offset the valuation burden stemming from elevated interest rates.

■ Odds Favor a October Rate 'Hold'

Market attention is shifting to the Fed's October rate decision. With job growth in the U.S. September employment report released last week slowing much more than expected, assessments are spreading that the Fed has less need to raise rates further this month.

According to CME FedWatch cited by Reuters, the probability of a rate hike at the October Federal Open Market Committee (FOMC) meeting has fallen to about 24%, down from roughly 70% just a week ago.

Interest rate futures markets show a similar trend. As of the afternoon of the 5th, the market priced in about a 75% chance that rates would remain at the current level of 3.75-4.00% at the October meeting, with only about a 25% chance of a 0.25 percentage point hike to 4.00-4.25%. In effect, the market is placing greater weight on the Fed holding rates steady.

■ Treasury Yields Hit 5.35% Intraday, Moving Opposite to Stocks

The bond market moved in the exact opposite direction of the stock market. As selling of U.S. Treasuries continued, the yield on the 10-year Treasury, considered the global financial market's benchmark, spiked to about 5.35% intraday. This is the highest level since 2002. Because Treasury prices and yields move inversely, stronger selling pushes yields higher.

Typically, a sharp rise in long-term yields is unfavorable for technology stocks, as it raises the discount rate applied when converting future earnings into present value. However, on this day, the market responded more strongly to the receding possibility of a Fed short-term policy rate hike and expectations for earnings growth at AI companies than to the rise in long-term Treasury yields.

■ Upcoming Variables: CPI, Employment Data, and Fed Commentary

The current key dynamic of the New York stock market is a standoff between 'the burden of rising Treasury yields' and 'easing fears of Fed rate hikes.' If long-term yields persist well above 5%, it could weigh on equity valuations. Conversely, if job growth continues to slow and inflation does not rebound strongly, the likelihood of the Fed holding rates steady in October could increase further.

Going forward, the market is expected to gauge the actual likelihood of additional rate hikes through U.S. consumer price data, employment indicators, and remarks from Fed officials.

[This article is informational content based on publicly available market data and does not constitute investment advice regarding specific financial products. Market outlooks and interest rate expectations may change depending on economic indicators and Fed policy. Investment decisions and responsibility rest with the investor, and AI assistance was used in writing this article and organizing the information.]