by David French
NEW YORK (Reuters) – The New York Stock Exchange ended lower on Tuesday, driven in particular by a decline in major technology stocks, as data indicating a rebound in activity in the United States in February fueled fears that the Federal Reserve (Fed) is raising rates more significantly than expected.
The Dow Jones index fell 2.06%, or 697.10 points, to 33,129.59 points.
The broader S&P-500 fell 81.75 points, or 2.00%, to 3,997.34 points.
The Nasdaq Composite fell for its part by 294.97 points (2.50%) to 11,492.30 points.
This is the worst day experienced by the main indices of Wall Street since the beginning of the year. The Dow Jones saw the gains recorded so far in 2023 fade, while the Nasdaq and the S&P-500 ended in the red for a third consecutive session.
According to the monthly survey by S&P Global, the preliminary results of which were published during the day, economic activity in the United States rebounded this month to reach an eight-month peak, with an index PMI of 50.2 against 46.8 in January.
These data echo other indicators that have highlighted the resilience of the US economy in the face of the successive increases in interest rates made last year by the Fed with the aim of controlling inflation.
While inflation remains far from the US central bank’s 2% target, financial markets are revising their expectations for a peak in the key interest rate this summer, currently expected at 5.35% in July.
The economic activity report “does nothing to erase fears that the Fed may be taking a conservative stance and raising rates higher than investors imagined just a month ago,” said Brian Jacobsen, a strategist at Allspring Global Investments.
Wall Street got off to a positive start to the year, after posting its worst decline in a decade last year, driven by investor optimism that monetary policy tightening will end soon. fed.
This mindset carrying major indexes in New York also makes markets more susceptible to pullbacks when data casts a shadow over what the US central bank might decide.
Investors are now awaiting the publication on Wednesday of the minutes of the Fed’s last meeting to find potential clues about the direction of its monetary policy.
All major sectors of the S&P-500 ended the session in the red.
On the stock side, tech giants Tesla, Amazon, Microsoft and Alphabet all declined, between 2.1% and 5.3%. This downward trend was amplified by rising bond yields, as 10-year US Treasuries hit a three-month high.
Home Depot fell 7.1% to a three-month low after warning of weaker demand and a lackluster full-year sales forecast.
Despite a lower-than-expected forecast for the full year as stronger-than-expected food price inflation eroded margins, Walmart ended in positive territory after falling for the session.
* The reminder of the session in Europe: [.EUFR]
* TO FOLLOW on Wednesday:
(French version Jean Terzian)
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