The Dow Jones closed in the green but close to balance, up 0.02%, while the Nasdaq dropped 0.66% and the broader S&P 500 index 0.47%.
The New York Stock Exchange ended in disarray on Wednesday, angered by another jump in bond yields under the effect of a rising US inflation indicator.
The Dow Jones ended in the green but close to balance, up 0.02%, while the Nasdaq index dropped 0.66% and the broader S&P 500 index, 0.47%.
“It’s hard for the market to ignore the 10-year rate going above 4%,” said Angelo Kourkafas of Edward Jones. “It’s a psychological threshold.”
The benchmark yield for the US bond market thus crossed this level on Wednesday for the first time in nearly four months.
The 2-year rate, which better reflects market expectations in terms of monetary policy, rose to 4.90%, a first for more than 15 years.
In question, the survey by the professional federation ISM of purchasing managers in the manufacturing sector revealed that the prices paid had soared in February, to 51.3 points, once morest 44.5 in January, at their highest level. since September.
“It’s not very encouraging, especially when we see inflation reaccelerating in Germany and Spain,” said Angelo Kourkafas. “This does not fit with the scenario of sharply decelerating inflation, which many believed at the start of the year.”
“The thesis in favor of further rate hikes is reinforced with this increase in the price paid to suppliers,” added Edward Moya of Oanda in a note. “The Fed hasn’t seen any real signs of slowing demand yet.”
The impression was reinforced by comments from Fed Chairman Atlanta, Raphael Bostic, and Minneapolis Chairman, Neel Kashkari, who both pleaded for further hikes on Wednesday.
The second does not rule out an increase of half a point at the next meeting of the Fed’s monetary policy committee, on March 21 and 22, a hypothesis that no one dared to mention a month ago.
“Technology and growth stocks had been able to resist until now, but with a 10-year rate at 4%, this weighs on their valuation,” said Angelo Kourkafas.
Several of the stars of the new economy thus bit the dust on Wednesday, from Amazon (-2.19%) to Apple (-1.42%), via Tesla (-1.43%), whose boss, Elon Musk, must make a presentation to investors, following the stock market.
On the other hand, so-called defensive stocks, i.e. stocks theoretically less sensitive to the economic situation, were sought following, such as the industrial conglomerates 3M (+2.23%) and Dow (+1.43%). %), as well as Boeing (+1.49%).
Elsewhere on the stock exchange, the electric vehicle manufacturer Rivian slipped out of control (-18.34%), weighed down by a lower quarterly turnover than expected by analysts and a production target for 2023 of 50,000 vehicles, significantly lower than market expectations.
Another exit from the road, that of Novavax (-25.92%). The laboratory mentioned Tuesday following the closing of the Stock Exchange a possible cessation of payments linked to the end of a contract with the American government and a dispute with the international organization Gavi regarding the purchase of 350 million doses of its Covid vaccine.
Driven by Chinese PMI activity indicators for February well above economists’ projections, Chinese companies listed on Wall Street had a good day. E-commerce platforms JD.com (+2.90%) and Alibaba (+2.46%) advanced, as did their competitor Pinduoduo (+5.79%).
HP was penalized (-2.24%) following reporting a turnover down nearly 19% in the first quarter of its staggered fiscal year, which ended in January, weighed down by the lack of appetite for personal computers in an uncertain macroeconomic environment.
