The New York Stock Exchange ended higher on Wednesday, driven by the minutes of the last meeting of the American central bank (Fed) and the proactive speech of its members in the face of inflation.
The Dow Jones gained 0.23%, to 31,037.68 points, the Nasdaq index, with a strong technological composition, 0.35%, to 11,361.85 points, and the broader S&P 500 index, 0.36%. at 3,845.08 points.
The market, which has been trading in a tight range all day, “turned from negative to positive just as the minutes came out this followingnoon,” Cresset Capital’s Jack Ablin said of the minutes. of the last meeting of the Fed’s Monetary Policy Committee.
“The Fed took advantage of the June meeting to dispel all doubts regarding its willingness to do what is necessary to stabilize prices,” commented Jamie Cox of Harris Financiel Group.
In the minutes, the members of the Committee consider it “appropriate” to proceed with further rate hikes following the one in June and accept the idea that the tightening cycle should affect the labor market.
The US central bank “has maintained a tough line and the market likes that,” explained Peter Cardillo of Spartan Capital.
If the rise in interest rates is often unfavorable to the equity markets, in particular at the current rate, the curbing of inflation would be a support factor for Wall Street.
The bond market also echoed the decided tone of the Fed and rates rose once more, following having fallen sharply in recent days.
The yield on 10-year US government bonds rose to 2.92%, once morest 2.81% the day before. It was significantly lower than 2-year rates (2.97%), a phenomenon called yield curve inversion that is often seen as a harbinger of a recession.
As traders increasingly saw the Fed slowing its rate hikes following the July meeting to account for the decelerating economy, Wednesday was an opportunity for a recalibration in this regard.
The probability of a double rise of 0.75 percentage point in July and September has thus risen significantly, according to traders.
Paradoxically, while technology and growth stocks had been driven on Tuesday by the drop in bond rates, they continued to rise on Wednesday, although these same yields rose sharply.
“We got so screwed up in June that the market is just looking for a reason to hope,” argued Patrick O’Hare of Briefing.com.
Semiconductor manufacturers Intel (+0.82%), Texas Instrument (+1.15%) and Qualcomm (+0.98%) were once more sought following.
The indices were also supported by very large caps, notably Apple (+0.96%), Alphabet (+1.16%) and Nvidia (+1.11%).
In contrast, Netflix fell 0.98% to $184.06, driven by a note from Barclays predicting a larger-than-expected drop in subscriber numbers.
The meal delivery platform DoorDash (-7.40%), and Uber (-4.53%), also present in this market via Uber Eats, had a hard time with Amazon’s acquisition of a stake in the capital of its rival Grubhub , a subsidiary of Just Eat Takeaway.
The manufacturer of electric vehicles Rivian jumped (+ 10.42% to 29.66 dollars) following reporting a 72% increase in production in the second quarter (4,401 vehicles) compared to the first, even if the volumes of the start-up are still modest.
The news penalized its competitors Tesla (-0.57%), Nikola (-0.19%) or Lordstown (-1.74%).
Chinese stocks faltered following the re-lockdown of several million people in China on Wednesday due to an epidemic rebound. The online sales platforms Alibaba (-0.84%), JD.com (-4.59%) or Pinduoduo (-7.40%) all posted a marked decline.
