The floor of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/AFP/SPENCER PLATT)
The New York Stock Exchange ended lower on Monday, relying on fears of an escalation in the Middle East to consolidate, a movement which particularly hit technology stocks.
The Dow Jones fell 0.65%, the Nasdaq index dropped 1.79% and the broader S&P 500 index fell 1.20%.
“The obvious excuse” for the contraction of the day “is the geopolitical factor”, reacted Patrick O’Hare, of Briefing.com.
Army Chief of Staff General Herzi Halevi said on Monday that Israel would “retaliate” for the weekend’s Iranian attack.
Iran launched hundreds of drones and missiles towards Israeli territory overnight from Saturday to Sunday, in response to an April 1 strike on the consular annex of the Iranian embassy in Damascus (Syria) , attributed to Israel.
Almost all of the missiles and drones were destroyed before hitting Israeli territory. It was Iran’s first direct attack on the Jewish state.
“This creates uncertainty,” admitted Patrick O’Hare, “but it should be noted that the 10-year rate has not benefited from an appetite for risk and that oil prices (down at the start session) recovered, but without flying away either.”
After initially jumping to 4.66%, compared to 4.52% on Friday at the close, the yield on 10-year US government bonds thus fell to 4.61%.
As for the price of a barrel of West Texas Intermediate (WTI), the American oil benchmark, it ended down 0.29%.
“Geopolitics played a role, but it is not the only element,” insisted Patrick O’Hare. “There is also a technical aspect.”
The S&P 500 thus fell below its average for the last 50 trading days, a major technical threshold, which led to a wave of sales.
In addition, “the idea is circulating that the market is ripe for a decline”, according to Patrick O’Hare. “It is not a correction, more a consolidation, an orderly retreat,” he clarified.
On the market, the tech giants were the first to be hit by this sales momentum. Meta (-2.28%), semiconductor manufacturer Broadcom (-2.48%) and its competitor Nvidia (-2.48%) particularly suffered.
Tesla went off the road (-5.59%) while several media outlets cite an internal email sent by Elon Musk to the manufacturer’s employees announcing the upcoming layoff of more than 10% of the workforce. The group is going through a difficult time, competing with several Chinese manufacturers with attractive prices.
Several companies in the defense and arms sector resisted the slump, after a weekend which saw one of the most imposing air offensives in recent years.
Among them RTX (formerly Raytheon, -0.07%), which manufactures, in collaboration with the Israeli group Rafael, the Tamir missiles, used as part of the “Iron Dome”, Israeli defense system.
Also doing better than the market were Lockheed-Martin (+0.60%) and L3Harris (+0.30%), major suppliers to the American army.
On the market, Goldman Sachs (+2.94%) rode results above expectations, with progress in all businesses, in particular consulting and debt and equity issues.
As Donald Trump’s first criminal trial opened on Monday, his media company Trump Media and technology Group (TMTG) continued its fall on the stock market (-18.35%). The stock has lost around 60% since its peak on March 26, reducing the fortune of the former head of state by more than 4 billion dollars.
Salesforce fell sharply (-7.33%) after the Wall Street Journal reported the possible acquisition by the online marketing specialist of the data analysis group Informatica (-6.37%), very committed in artificial intelligence. But the daily reports that the offer is lower than Informatica’s current price, which has risen significantly in recent months.
© 2024 AFP
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