"'Tariffs are illegal' ruling' sends three major indices down…bond yields 'rise' [New York stock market briefing]"

"Bond market anxiety intensifies amid fears of widening fiscal deficit"

As uncertainty grew after a court ruling that the Trump administration's tariff policy is unlawful, the three major U.S. stock indices closed lower on the 2nd (local time) in New York.

On the day at the New York Stock Exchange, the Dow Jones 30 Industrial Average closed at 45,295.81, down 249.07 points (0.55%) from the previous trading day.

The Standard & Poor's (S&P) 500 index closed at 6,415.54, down 44.72 points (0.69%) from the previous trading day, and the Nasdaq Composite, centered on technology stocks, closed at 21,279.63, down 175.92 points (0.82%) from the previous trading day.

Uncertainty over tariffs increased after the appellate court ruled on the 29th of last month that the reciprocal tariffs imposed by President Donald Trump were unlawful, weighing on both the bond and stock markets.

In particular, the court decision that reciprocal tariffs are unlawful raised concerns that, if confirmed by the U.S. Supreme Court, tariff revenues could decline and lead to a widening fiscal deficit, which in turn pushed bond yields higher.

According to electronic trading platform Tradeweb, the 10-year U.S. Treasury yield, the global benchmark for bonds, was 4.27% around the close of the New York market, up 4bp (1bp=0.01% point) from the previous trading day.

Because bond yields and bond prices move in opposite directions, a rise in bond yields means a fall in bond prices.

The yield on the long-term 30-year U.S. Treasury was 4.97% at the same time, up 5bp from the previous trading day. The 30-year U.S. Treasury yield attempted to break above the 5% level that morning, marking its highest level in about a month since July.

Major European countries such as the U.K., Germany and France also saw long-term government bond yields surpass multi-year highs amid concerns about deteriorating public finances, which heightened worries across the global bond market.

As bond yields rose, major tech stocks including Nvidia (-1.97%), Tesla (-1.35%), Apple (-1.04%) and Amazon (-1.60%) all showed weakness that day.

Noh Jeong-dong, Hankyung.com reporter dong2@hankyung.com