Yes newborn babies can and do feel love when you hold them and care for them.
The newborn cannot tell you they feel the love but the newborn baby does feel the love and the newborn baby can also sense when they are not loved.
Just like a newborn can sense when they don't like someone by crying the newborn can also sense the love they feel from their mother, father, siblings etc.
So even though the newborn is unable to let you know they know you love them they still do.
Eventually as the baby gets older they can even more express their love for you and show their love back to you.