Wall Street ends messy, new fears over Fed

The New York Stock Exchange ended in turmoil on Tuesday and was deprived of any real recovery after remarks by a Fed official that were deemed aggressive.

The Dow Jones fell 0.26 percent, the tech-heavy Nasdaq index gained 0.98 percent and the broader S&P 500 index gained 0.25 percent.

After three sessions where traders struggled and suffered significant losses, indices looked poised to recover when trading began.

“The drop in 10-year yields (US government bond yields) has been a catalyst for the market, with the fact that the market has been on a spectacular rise,” said Quincy Krosby of LPL Financial.

The Nasdaq, which has been on a rubber band for weeks, climbed 2.76% at the start of the session, before lowering its sails significantly as the Dow Jones did, which ended in a fourth drop. line and the S&P 500.

This reversal was reversed as Wall Street “faced a number of headwinds, including concerns about the Fed[the U.S. central bank]inflation, and the possibility of an economic slowdown,” Schwab analysts wrote in a note.

Added to the context were statements by Loretta Mester, the head of the Fed’s Cleveland branch, who said she was open to a 0.75 percentage point hike in the key interest rate at the Fed’s upcoming meeting in case of a rise in prices. It did not decrease in the United States.

“It has helped turn the market,” said Marc Chandler, head of market strategy at Bannockburn Global Forex brokerage firm.

Ms. Mester’s comments also affected the bond market, which lost its resurgence in the morning. The yield on 10-year government bonds fell quite sharply to 2.93%, rising to 2.99%. Interest rates move in the opposite direction of bond prices.

Another reason for the fluctuation of the day is the lack of conviction of investors on the eve of the publication of the American inflation indicator CPI, which should inform about the burning issue of inflation.

“The market hopes to see confirmation that inflation peaks and then slows down,” Quincy Krosby warned, warning that “a point or two on a curve hasn’t changed direction” and will undoubtedly not have to wait for a while. before confirming this return.

In recent weeks, tech heavyweights from Nvidia (+3.81%) to Intel (+2.18%), Broadcom (+3.28%) or AMD (+2.74%) have taken to New York City. tried to revive it. market.

To a lesser extent, Apple (+1.61), Microsoft (+1.86), and Alphabet (+1.33) were also entitled to respite.

Conversely, banking stocks were avoided as investors were more mindful of the impact of a possible economic slowdown on credit volume and quality than the restoration of higher margins.

Bank of America (-1.68%), JPMorgan (-2.44%) or Wells Fargo (-2.00%) fell.

Elsewhere, the Peloton suffered after posting lower-than-expected turnover and a larger-than-expected loss (from -8.70% to $12.90). Even more worrying for investors, the company said equity capital is “weak”, which has fueled fears for the sustainability of experts in indoor bikes and connected treadmills.

Pfizer rose especially after the announcement of the acquisition of Biohaven Pharmaceutica lab, which specializes in the treatment of migraine, for $11.6 billion (from +70.78% to $141.99) (+1.75 to $49.49).

Norwegian Cruise has soared with results considered encouraging and announcing that bookings for the fourth quarter of 2022 are at the pre-pandemic level of 2019 (from +1.63% to $16.21). The cruise line also covers an entire fleet for the first time in more than two years.

  1. Nasdaq