(CercleFinance.com) – The New York Stock Exchange fell heavily on Friday, weighed down by inflation figures at their highest which revived concerns of sharp rate hikes from the Federal Reserve.
An hour after opening, the Dow Jones dropped 2.4% to 31,497.7 points, while the Nasdaq Composite fell more than 3% to 11,378.9 points.
Investors are still a little more alarmed by the evolution of inflationary pressures, which show no signs of easing, far from it, as shown by the latest statistics from the Labor Department.
After rising 0.3% in April, consumer prices jumped 1% sequentially in May, a much stronger rise than the 0.7% expected by economists.
On an annual basis, the American price index posted an increase of 8.6% at the end of May – a record since December 1981 and a level four times higher than the 2% target set by the Fed.
On the side of the economists of Liberum, it is judged that these figures become particularly ‘worrying’.
‘This surprise surge in headline inflation and the broad-based rise in all components of its base version suggest that the Fed will continue to hike rates aggressively in the second half of the year’ , worries the London design office.
‘This makes the scenario of a recession in the United States almost inevitable,’ warns the London cabinet.
The difficulties of the US economy are already starting to show up in certain indicators.
Published in the morning, the index of consumer confidence of the University of Michigan index deteriorated to 50.2 in preliminary estimate in June, against 58.4 in May.
US government bond yields are rising in response to unprecedented strength in the latest inflation data.
The benchmark 10-year bond rate on the US market thus rose to nearly 3.12%, a new high since the end of 2018.
The VIX index of volatility, for its part, tightened by almost 10% to almost 28.7 points, testifying to a clear resurgence of nervousness on the part of operators.
All of the 11 S&P sector indices are in the red, even those deemed to be favorably exposed to rising rates such as finance (-2.2%) or energy (-0.3%).
Contrary to the trend in the first exchanges, AMD finally turned downwards and now drops more than 3% the day after an investor day, however hailed by analysts.
On the front of technology stocks still, Netflix unscrewed by almost 5% after being downgraded to the sale by analysts at Goldman Sachs.
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