NEW YORK (Agefi-Dow Jones)–The New York Stock Exchange closed lower on Wednesday after reports of accelerating inflation raised fears of a sharp rise in interest rates and heightened risk of recession. across the Atlantic.
Deviating from its low points for the session, the Dow Jones finally lost 0.7% to 30,772.79 points. The broader S&P 500 index ended down 0.5% at 3,801.78 points. The Nasdaq Composite fell just 0.2% to 11,247.58 points.
In its Beige Book on the state of the economy, the Federal Reserve (Fed) also warned that signs of an economic slowdown had appeared in several regions of the United States. Rising food and energy prices are weighing on consumption, the central bank pointed out.
Inflation figures released on Wednesday reinforced recession fears that had already dampened indices since the start of the week, as the scenario of a strong monetary tightening by the Federal Reserve (Fed) seems increasingly more likely.
Consumer prices in the United States rose 9.1% year on year in June, beating the forecasts of economists polled by the Wall Street Journal, who expected an inflation rate of 8.8%, after the 8.6% increase observed in May.
The core index, which excludes food and energy prices, was up 5.9% over one year and 0.7% over one month. Economists polled by the Wall Street Journal were anticipating an increase in the core index of 5.7% over one year and 0.5% over one month.
Following this publication, the dollar resumed its progression and reached a new high point since 2002. The greenback regained parity with the euro in the session, already reached on Tuesday, before falling back very slightly, to 0, 9944 euro for one dollar.
On the bond market, the yield on the 10-year Treasury note fell 4 basis points to 2.933%, dampened by fears for growth. The 2-year yield, on the other hand, gained 6 basis points, to 3.103%. According to CME Group’s FedWatch tool, the likelihood of a one-percentage-point hike in the Fed’s key interest rates at the end of the month jumped to 82% by late trading in futures markets. On Tuesday, traders were only holding out a 7.6% chance of a rally of such magnitude.
VALUES TO FOLLOW:
-Twitter (+7.9%) filed a complaint on Tuesday against Elon Musk to challenge the latter’s decision to denounce the social network’s takeover agreement for 44 billion dollars. The Californian group took legal action to force the contractor to respect the terms of the agreement concluded in April with its board of directors.
-Google, a subsidiary of Alphabet (-2.3%), will slow down its hiring until the end of the year, announced to the staff the CEO of the search engine, Sundar Pichai. In an email sent to employees on Tuesday, Sundar Pichai said that Google is “slowing down[ait] the pace of its recruitments during the rest of the year, while continuing to support [ses] most important projects.
-Credit Suisse (-2.8% on Wall Street) postponed the IPO of its real estate fund 1a Immo PK due to market conditions. The Swiss bank had initially planned a listing of this fund in the fourth quarter of 2022.
-New York Bureau, The Wall Street Journal (French version Thomas Varela, Eric Chalmet) ed: LBO – ECH
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July 13, 2022 16:32 ET (20:32 GMT)