2023-06-29 20:32:55
Traders on the floor of the New York Stock Exchange, USA
(Archyde.com) – The New York Stock Exchange ended higher on Thursday, buoyed by major banks following successful ‘stress tests’, as data showing the strength of the U.S. economy stoked fears of a tightening money longer than expected.
The Dow Jones Industrial Average gained 0.8%, or 269.76 points, to 34,122.42 points.
The broader S&P-500 gained 19.58 points, or 0.45%, to 4,396.44 points.
The Nasdaq Composite advanced by 0.42 points (0.00%) to 13,591.33 points.
The big banks supported the trend following the results of the Fed’s annual “stress test” which showed that these establishments have enough capital to face a serious economic crisis. Morgan Stanley, Bank of America, Goldman Sachs, JPMorgan Chase and Wells Fargo gained 1.5% to 4.5%.
In other sectors, investors opted for caution following the publication of new data showing the resistance of the US economy – and its corollary: the risk that the Fed will continue its monetary tightening policy more than expected for curb inflation.
Growth in gross domestic product (GDP) was thus stronger than initially estimated in the first quarter, by 2.0% at an annualized rate compared to the previous three months, according to statistics from the US Department of Commerce.
Jobless claims also fell last week to 239,000 following 265,000 (revised) the previous week.
These statistics ward off fears of a recession, despite a target for the federal funds rate now at 5.00%-5.25%, compared to a rate close to zero before the start of the tightening cycle that began in March 2022.
This restrictive monetary policy is therefore likely to continue, especially since Jerome Powell, the chairman of the Federal Reserve, has declared that he does not see inflation returning to the central bank’s target “this year or the next year”.
(Written by Sinéad Carew, Sruthi Shankar and Johann M Cherian, French version Tangi Salaün)
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