Wall Street appreciates the Fed’s way and ends higher

The floor of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/AFP/Michael M. Santiago)

The New York Stock Exchange, which had started strong in the first part of the session, ended Thursday slightly higher the day after another modest interest rate hike by the Fed, perhaps the penultimate of the series. .

The technology sector led the rebound, with the Nasdaq gaining 1.01%. at 11,787.40 points. The Dow Jones index climbed 0.23% to 32,105.25 points and the S&P 500 0.30% to 3,948.72 points.

On Wednesday, the U.S. Central Bank (Fed) raised interest rates by just a quarter of a percentage point and, crucially, signaled that it was considering only one more such hike in the near term. , which reassured the markets on Thursday.

“The Fed said it was going to take a break on another hike. That’s a positive signal and that’s why the market performed relatively well today,” said Hugh Johnson of Hugh JohnsonEconomics.

According to him, the markets, which had concluded in the red the day before, had “misinterpreted” the comments of the chairman of the Fed Jerome Powell during which he seemed “to indicate that several rises could follow”.

“But on closer inspection, markets are realizing the Fed is planning to pause after just one more hike to assess the impact of both rate hikes and cuts in lending,” he said. which should slow the economy like inflation, the analyst told AFP.

The decline in consumer lending in the United States began this year, according to Mr Johnson, long before the onset of the turbulence in regional banks.

After the Federal Reserve, the Swiss National Bank announced a 50 basis point rate hike to 1.50%, as expected, and said the country’s banking crisis was over. The Bank of England (BoE) also raised its key rate on Thursday for the 11th consecutive time (+0.25 points to 4.25%).

Thursday, a jobs indicator has also restored good mood to the market with filings of weekly applications for unemployment benefits which remained well below 200,000, at 191,000, contrary to expectations.

As for the real estate market, sales of new homes rose slightly in February to 640,000 on an annual basis. However, they remain down 19% over one year.

On the stock market, the market was driven exclusively by communication (+1.83%) and information technology (+1.65%). All other sectors remained in the red.

Meta (Facebook and Instagram) seemed to benefit (+ 2.24%) from the bad quarter of an hour spent by the boss of TikTok during a hearing in the American Congress. The platform, a subsidiary of the Chinese group Bytedance, is threatened with a ban in the United States.

Other social network shares such as Snap (+3.08%) or Pinterest (+0.51%) also benefited from the situation.

Netflix, which competes with TikTok for consumer entertainment time, jumped 9%.

The group of Jack Dorsey, Block (formerly Square) fell 14.82% to 61.88 dollars, attacked by the investment fund Hindenburg Research. In a document released on Thursday, Hindenburg argues that Block “misled investors by publishing overstated data” regarding its user numbers.

Co-founded by former Twitter boss Jack Dorsey, Block, which notably owns the Cash App, is dedicated to financial transactions.

Cryptocurrency exchange Coinbase slumped 14.05% amid threats of lawsuits from the stock market watchdog, the SEC, for violating securities law.

The market welcomed the savings plan from the consulting firm Accenture, which announced the elimination of around 19,000 jobs, or 2.5% of its workforce, spread over the next 18 months. The stock rose 7.26% to $271.66.

In the bond market, yields on ten-year Treasury bills eased to 3.39% from 3.43% on Wednesday.

© 2023 AFP

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