News Maker 23

US stock markets rose during Friday's trading (August 21) as investors sought a rebound following a sharp sell-off in the previous session—a decline triggered by a surge in US government bond yields. The Dow Jones Industrial Average climbed 264 points, or 0.5%, while the S&P 500 and Nasdaq Composite each gained approximately 0.4%.

Wall Street's gains followed an easing of significant pressure on the bond market, although Treasury yields remain a primary focus for investors. In the prior session, US stocks had come under pressure as Treasury yields rose again, driven by market concerns that inflation could be stoked by climbing global oil prices.

Throughout the week, major Wall Street indices remained under pressure. The S&P 500 is on track to snap a three-week winning streak with a decline of over 1%, while the Nasdaq has fallen more than 2%, and the Dow Jones is also heading toward its second consecutive weekly loss.

Investors continue to debate the effectiveness of the US Treasury Department's move to increase its long-term Treasury bond buyback program. UBS analysts distinguish this policy from the Federal Reserve's quantitative easing (QE), noting that the government cannot print money to finance asset purchases. The buyback program merely alters the debt maturity structure rather than reducing the total amount of debt the market must absorb.

Concerns regarding heavy US government debt issuance and inflationary pressures have kept investors cautious about global stock markets. The MSCI All Country World Index is also on track for a weekly decline of around 1.5%, marking its largest drop in five weeks.

In global markets, European stocks saw muted movement; the Stoxx Europe 600 rose 0.1%, while the UK's FTSE 100 remained flat and Germany's DAX gained 0.2%. In Asia, Japan's Nikkei 225 fell 0.30%, South Korea's Kospi rose 0.88%, Australia's S&P/ASX 200 weakened 0.27%, and China's CSI 300 strengthened 0.57%.

Newsmaker Analysis: Wall Street's current rebound remains technical in nature following the sell-off driven by rising Treasury yields. Investor focus remains fixed on the direction of Federal Reserve interest rates, inflation trends, and the US government's ability to maintain bond market stability. Should yields surge again, pressure on technology stocks and risk assets could intensify once more.

Source: Newsmaker.id