Wall Street: Directionless after strong indicator

(CercleFinance.com) – Wall Street is looking for a trend on Wednesday after three sessions of rebound, the market struggling to find a direction after the publication of a solid statistic likely to reinforce the caution of the Fed.

At the end of the morning, the Dow Jones nibbles 0.1% to 32,458.4 points, while the Nasdaq Composite fell 0.7% to 11,686.7 points. The broader S&P 500 index fell back by 0.2%.

Supported by the lack of adverse developments on the banking sector front, the S&P had rallied more than 1% in the previous three sessions.

Investors learned shortly after the opening that the Conference Board’s consumer confidence index came in at 104.2 in March, down from 103.4 in February.

Conversely, the consensus was expecting it to fall to 101 due to the recent turmoil that affected the financial markets.

In its press release, the ‘ConfBoard’ explains this progression by the improvement in the morale of consumers aged under 55 and paid more than 50,000 dollars per year.

This good surprise concerning household morale is naturally fueling the ongoing debate on the prospect of further rate hikes from the Federal Reserve.

These data – which confirm the resilience of the world’s largest economy – reinforce the growing skepticism in the markets regarding the timeliness of a possible rate cut.

According to the CME Group’s ‘FedWatch’ barometer, investors estimate the probability of a quarter-point rate hike at the end of May’s FOMC at just 50%, compared to 40% yesterday.

On the bond market, the yield on ten-year Treasuries continued to rise above 3.55%, illustrating the strengthening of expectations of a new tightening of the central bank.

On the energy front, oil is stabilizing after two turbulent weeks, with a barrel of US light crude still advancing 0.4% to 73.1 dollars.

With crude oil firming, oil stocks posted the best sector performance of the day (+1.4%), followed by utilities (+1.1%) and consumer staples (+0.7%).

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