The Dow Jones fell 1.05% while the Nasdaq fell more than 2%. The broader S&P 500 index fell 1.48%.
The New York Stock Exchange ended lower on Thursday, the indices turning around following statements by the President of the American Central Bank (Fed), which almost formalized a marked increase in rates in May.
The Dow Jones fell 1.05%, the tech-heavy Nasdaq index fell 2.07%, and the broader S&P 500 index fell 1.48%.
“Today, whether it’s stocks or bonds, everything is linked to the ECB and the Fed,” explained Karl Haeling, analyst at LBBW bank.
In an interview with the Bloomberg agency, the vice-president of the European Central Bank, Luis de Guindos, indicated Thursday that the end of net purchases of debt securities “should” stop as early as July.
He also felt that a rate hike “in July (was) possible”.
At a roundtable on Thursday on the sidelines of the International Monetary Fund (IMF) spring meetings, Fed Chairman Jerome Powell told him that a rate hike of half a percentage point “( would be) on the table at the May meeting” (3rd and 4th).
“This parade of Fed officials with aggressive comments (on the monetary level) means that the market now expects three consecutive half-point increases,” noted Karl Haeling.
In the wake of Jerome Powell’s remarks, bond rates went up significantly.
The yield on 10-year US government bonds rose to 2.95%, not far from its three-and-a-half-year high reached on Wednesday (2.97%).
Karl Haeling expects markets, “particularly bonds, to remain weak until the next Fed meeting.”
Comments from central bankers erased the gains recorded at the start of the session thanks to a few results from high-profile companies, first and foremost Tesla.
The manufacturer (+ 3.23% to 1,008.78 dollars) has, in fact, published Wednesday, following the stock market, a record net profit of 3.3 billion dollars in the first quarter, much better than the 2.2 billion expected .
Tesla has played with supply problems and confinements in China, to the point that CEO Elon Musk considered it possible to end the year with a 60% growth in production.
Wall Street was also carried away by the results of American Airlines (+3.80%) and its competitor United Airlines (+9.31%), and their encouraging speech on the resumption of attendance.
If they still recorded heavy losses in the first quarter, the two airlines expect a return to profitability in the second quarter.
These sought-following stocks have escaped the cold snap that gripped Wall Street, and painted red most growth stocks, struggling in a context of rate hikes.
The graphics card manufacturer Nvidia (-6.05%) or the semiconductor specialists AMD (-4.44%) or Qualcomm (-3.01%) have thus plunged.
Netflix also had another difficult day (-3.52% to 218.22 dollars), following the 35% drop on Wednesday. Investors are still digesting the results published on Tuesday, which showed a net loss of subscribers, a first for more than ten years.
To make matters worse, investor Bill Ackman announced that his company had offloaded hundreds of millions of dollars of Netflix titles, due to questions regarding the group’s trajectory.
Investors were also seduced by the publication of the American chemical giant Dow (+2.92% to 69.51 dollars), which managed to increase its prices by more than 20% over one year.
Disney lost ground (-2.34% to 121.66 dollars) following the abolition, by the Florida State Parliament, of the favorable tax status enjoyed by the Disney World amusement park.
Floridian elected officials have thus sanctioned the group for having criticized a law prohibiting the mention of sexual orientation or gender identity in elementary school.
