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New York (AFP) – The New York Stock Exchange ended in disarray on Tuesday, failing to rebound, halted by a further rise in bond rates and information regarding the possible sabotage of two gas pipelines in Europe.
The Dow Jones chained a sixth consecutive session of decline and dropped 0.42%, but also recorded a new low for the year at the end, the third in a row. As for the Nasdaq, it gained 0.25%, while the broader S&P 500 index gave up 0.20%.
Wall Street had opened in the green and picked up speed in the morning, helped, in part, by statements from the president of the Chicago branch of the Federal Reserve (Fed), Charles Evans. The central banker said he was “nervous” at the idea of chaining rate hikes without pausing to assess the impact on the economy.
But the counterpoint was provided later in the day by his St. Louis counterpart, James Bullard, who said the labor market was strong enough for the institution to get inflation under control “as quickly as we can.” we can”.
Minneapolis branch chairman Neel Kashkari echoed this, saying the Federal Reserve was carrying out its monetary tightening at “an aggressive and appropriate pace.”
“The message from the Fed, which wants to remain mobilized (…) suggests that operators will be very cautious before following the rebound and projecting themselves upwards”, commented Quincy Krosby, of LPL Financial.
“The biggest thing today was bond rates,” said Tom Cahill of Ventura Wealth Management. “They keep breaking records.”
The yield on 10-year government bonds thus came close to the symbolic threshold of 4%, at 3.99%, the highest for 12 years, before settling slightly, at 3.96%, once morest 3.92% Monday.
For Tom Cahill, this already negative climate for equities was superimposed on the news of a possible sabotage of the two Nord Stream gas pipelines, victim of leaks following detonations. Danish Prime Minister Mette Frederiksen spoke of “deliberate acts” and her Swedish counterpart Magdalena Andersson spoke of “sabotage”, like the President of the European Commission, Ursula von der Leyen.
“It’s hard to get really upside, even if the market is oversold, with all these headwinds,” said Tom Cahill.
Sign of a new bout of nervousness on Wall Street, the VIX index, which measures market volatility, has risen to a more crowded height since mid-June.
“I found it curious that it had been very low in recent weeks,” observed Tom Cahill. “But today I see fear in the market.”
The Nasdaq was saved by a bargain hunt, which benefited Apple (+0.66%), Tesla (+2.51%), Nvidia (+1.51%) or Broadcom (+0.54% ), notably.
Cheap purchases also targeted some of the most volatile stocks on the stock exchange, whether Airbnb (+3.04%), PayPal (+1.77%) or AMC (+9.08%).
In contrast, the Dow Jones was weighed down by McDonald’s (-2.90%), which a Citi analyst plans to downgrade in its recommendations, Procter & Gamble (-2.75%) or Coca-Cola (- 2.57%).
The subsidiary of the manufacturer of legendary Harley-Davidson motorcycles dedicated to electric vehicles, LiveWire, had a difficult first day of trading and lost 12.14%, to 8.25 dollars.
© 2022 AFP
