Wall Street: Directionless with rate pressures

(CercleFinance.com) – The New York Stock Exchange is moving without a clear direction on Tuesday against a backdrop of a continuous rise in bond yields in the face of uncertainties surrounding the evolution of the Fed’s monetary policy.

At the end of the morning, the Dow Jones fell 0.4% to 33,763 points, while the Nasdaq Composite advanced 0.1% to 11,898.7 points.

Fears of further monetary tightening orchestrated by the Federal Reserve are weighing on the bond market, especially since the publication last Friday of solid employment figures.

At nearly 3.65%, after reaching 3.66% at the start of the day, the yield on 10-year US Treasury bonds is heading back towards its highest since the start of the year.

This new access of tension on the bond market is explained by the imminence of the speech of Jerome Powell, the president of the Fed, who must speak at midday during a conference organized by the Club economy of Washington.

The general idea is that the speech of the head of the central bank should remain very firm and that he should repeat that the fight against inflation is far from won.

Not all asset classes are victims of the withdrawal of investors, gold in particular finding favor in their eyes, a sign that risk aversion is not yet widespread.

The rise in yields supported the dollar, which rose 0.3% against the euro, which returned to quote around 1.0690 against the greenback.

The end of the earnings season also explains the sluggishness of trade, while the announcement of a widening trade deficit in December did not really have an impact on the rating.

Among the few companies to have published its quarterly performance, DuPont de Nemours climbed 5.2% after announcing a quarterly EPS up 16% with an operating margin up 1.2 points to 24.4% for revenues in down 4% to $3.1 billion.

Activision Blizzard also gained 5.2% after announcing non-GAAP EPS of $0.78 versus $1.01 for the fourth quarter, for an operating margin of 24% and revenue growth of 8 % at $2.33 billion.

Biggest rise in the Dow Jones, Microsoft climbed 2.1% before a press conference was held to unveil the outlines of its partnership with OpenAI, the owner of the artificial intelligence application ChatGPT.

According to analysts, the Redmond (Washington) giant could decide to integrate ChatGPT functionalities into its Bing search engine in order to better compete with Google.

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