NEW YORK (Agefi-Dow Jones)–The New York Stock Exchange opened 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.
The Dow Jones lost 1.1% at the start of the session, to 30,639 points, and the broader S&P 500 index lost 1.1%, to 3,777 points. The Nasdaq Composite fell 1% to 11,150 points.
Inflation figures released on Wednesday reinforce 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 to grow. 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. Over one month, consumer prices rose by 1.3% in June, in seasonally adjusted data. Economists expected an increase of 1.1%.
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 against a basket of currencies and reached a new high point since 2002 by returning to parity with the euro, already reached on Tuesday.
On the bond market, the yield on the 10-year Treasury bond gained 6 basis points, to 3.034%. The 2-year yield jumped 11 basis points to 3.157%. According to CME Group’s FedWatch tool, traders now estimate a 42% chance of a full percentage point hike in the Fed’s key rates at the end of the month. The likelihood of such a large hike was estimated at just 7.6% on Tuesday.
VALUES TO FOLLOW:
-Twitter (+5.3%) 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 compel the contractor to respect the terms of the agreement concluded in April with its board of directors.
-Google, a subsidiary of Alphabet (-2%), 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 (-2.1% 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.
EVENTS TO COME:
– 4:30 p.m.: oil stocks – week ended July 8
-8:00 p.m.: Federal Reserve Beige Book
-New York Bureau, The Wall Street Journal (French version Thomas Varela, Eric Chalmet) ed: LBO – ECH
Agefi-Dow Jones The financial newswire
Dow Jones Newswires
July 13, 2022 10:05 ET (14:05 GMT)