The floor of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/AFP/SPENCER PLATT)
The New York Stock Exchange ended sharply lower on Wednesday, frozen by the offensive communication from the American central bank (Fed), which sees its key rate remaining at a very high level for a long time.
The Dow Jones lost 0.22%, the Nasdaq index fell 1.53% and the S&P 500 index lost 0.94%.
The New York market was stunned by the message from the Fed, which left its key rate unchanged but clearly indicated that it remained in a position to combat inflation.
It “set the scene for a new rate increase in 2023 and its projections only show two reductions in 2024, compared to four previously,” explained Art Hogan, of B. Riley Wealth Management, a sign that rates will remain very raised longer.
The Federal Reserve “was a little more aggressive than people expected,” added Rusty Vanneman of Orion Advisor Solutions. “And that sent the market into a tailspin.”
In the process, bond rates rose further. The yield on 10-year US government bonds climbed to 4.39%, a peak since November 2007. As for its 2-year equivalent, more responsive to monetary policy expectations, it took off to 5.17 %, the highest in 17 years.
“We are in for a checkered end to the year as (operators) digest projections that are less favorable than expected for the growth assets that drove the market in 2023,” commented Alex McGrath, of NorthEnd Private Wealth.
The analyst was mainly referring to the giant capitalizations of the technology sector, which have boosted Wall Street since January. On Wednesday, they received the Fed’s message badly, like Nvidia (-2.94%), Microsoft (-2.40%) or Alphabet (-3.05%), Google’s parent company.
Also a member of the tech universe, digital marketing specialist Klaviyo escaped the storm for its first day of trading.
The Boston group managed to finish up 9.20% and is now valued at around $10.1 billion, taking into account securities and stock options allocated to employees and managers.
The IPO market remains convalescent, as shown by the backlash suffered by Instacart (-10.68%), the day after its first gallop on Wall Street.
Arriving on the stock market on Thursday, the microprocessor designer Arm recorded a fourth consecutive session of decline (-4.10%), after the jump in its first session (+24.69%).
Since this first day of trading, the British group has lost some $11 billion in market valuation.
The social network Pinterest was sought after (+3.09%), the day after an investor day which saw the San Francisco group anticipate an acceleration in its growth and an improvement in its margins.
With the continuation of the strike in the automobile sector, which has now lasted five days, without major progress, the manufacturers Ford (-1.59%) and General Motors (-2.24%) have been targeted. Having higher stocks, which allows it to better cope with the consequences of the shutdown of production sites, Stellantis did well (+1.71%).
© 2023 AFP
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