Wall Street ends split, consolidation ahead of inflation indicator

The New York Stock Exchange closed mostly in the red on Wednesday, exhausted by a long series of gains and seized by a bout of caution before the publication of an inflation indicator on Friday.

The Dow Jones lost 0.70% and the broader S&P 500 index, 0.19%, while the Nasdaq index ended close to balance (+0.04%).

The Dow Jones remained on four consecutive record highs at the close and on eight positive sessions in ten trading days.

“We had a great sequence,” commented Tom Cahill of Ventura Wealth Management, for whom it was time to take a breather.

For the manager, “there is also excitement before Friday’s inflation figures”, with uncertainty prompting operators to take precautions. “They have no incentive to move before.”

Economists expect the consumer price index (PCE), the inflation data most closely monitored by the US central bank (Fed), to slow in August to 2.3% over a year compared to 2.5% in July.

Tom Cahill said Wall Street will be looking for other information in the PCE report, particularly that concerning household consumption.

“Consumption is holding up, but if you listen to the comments of business leaders, their discourse is more pessimistic than what we see in the macroeconomic indicators,” he emphasizes.

During this dull day, the Nasdaq managed to finish in the green thanks to the semiconductor sector, in particular Nvidia (+2.18).

The industry was boosted by a report from consulting firm Bain & Company, which predicts annual growth of 40% to 55% for artificial intelligence (AI) hardware and software through 2027.

AMD (+2.34%), Intel (+3.20%) and chip designer Arm (+2.18%) also benefited from this report.

Meta was praised (+0.88%) after presenting its latest innovations at the Connect conference, including an AI assistant with which one can converse orally and connected glasses.

US Steel gained a little ground (+1.11%) after arbitrators considered that the conditions of its possible acquisition by Nippon Steel respected the terms of the social agreement in force within the steelmaker.

The case remains pending the decision of President Joe Biden, who is not expected to rule until after the election.

General Motors (-4.87%), Rivian (-6.84%) and Ford (-4.14%) were victims of a recommendation downgrade from Morgan Stanley, which pointed to Chinese competition as well as an increase in stocks in the United States.

Betting giant Flutter (FanDuel, Paddy Power, Betfair) was voted in favor (+5.12%) after publishing medium-term targets that were more ambitious than the market expected.

The group now sees the US online betting and gaming market reaching $63 billion by 2030.

Its American competitor DraftKings was not far behind (+5.01%).

Amgen (-5.46%) did not benefit from positive results from clinical studies for its rocatinlimab treatments for eczema and Uplizna for myasthenia gravis (a neuromuscular disease).

Analysts have greeted these results unenthusiastically, judging them insufficient to position these drugs well against the competition.

On the bond market, the yield on 10-year US government bonds rose significantly to 3.79% compared to 3.73% the previous day at the close.

Investors are moving away from long-term Treasuries in favour of short and medium maturities, which are more sensitive to the start of monetary easing by the US central bank (Fed), according to Marc Chandler of Bannockburn Global Forex.

© 2024 AFP

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