2023-08-15 20:57:58
Photo of traders in New York
par Amruta Khandekar, Shristi Achar A et Saeed Azhar
(Archyde.com) – The New York Stock Exchange ended sharply lower on Tuesday following better-than-expected U.S. retail sales data fueled fears that interest rates will remain high for longer than expected, while that the big banks declined following a warning from Fitch.
The Dow Jones index fell 1.02% to 34,946.39 points.
The broader S&P-500 lost 1.16% to 4,437.86 points.
The Nasdaq Composite fell for its part by 1.14% to 13,631.05 points.
The monthly report released today by the US Department of Commerce showed that retail sales rose 0.7% in July, once morest a consensus of +0.4%, suggesting that the US economy remained solid.
While the data didn’t sway traders, who still expect 89% of the US Federal Reserve (Fed) to pause its monetary tightening campaign in September, analysts said investors are worried that interest rates would stay at their current level for longer than expected.
This context of rate uncertainty had an impact on bank equities, with an inversion of the bond yield curve – long-term US Treasuries rose less than short-term debt instruments, an unusual situation that weighs on the profits that banks can make from loans.
The Fitch agency has warned that it might downgrade the rating of several American banks, CNBC television reported.
It “weighed on sentiment,” said Wedbush Securities executive Michael James. “Combined with the better-than-expected retail sales data, this further fuels the high interest rate scenario for a longer duration,” he said.
JPMorgan Chase, Bank of America and Wells Fargo declined between 2.3% and 3.2%. The S&P-500 banking index fell 2.75% to a one-month low.
All the major sectors of the S&P-500 ended the session in the red, in particular energy, weighed down by the decline in oil prices.
Other notable stock moves include General Motors’ 2.3% decline following Berkshire Hathaway reduced its stake in the automaker.
Alibaba Group and other Chinese companies listed on Wall Street declined in the wake of disappointing economic data in China.
(French version Jean Terzian)
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