The facade of the New York Stock Exchange (AFP/Angela Weiss)
The New York Stock Exchange opened lower on Tuesday, still scared by the rise in rates and in a waiting position before the verdict of the American central bank (Fed), which should raise its key rate on Wednesday.
Around 2:10 p.m. GMT, the Dow Jones fell 1.15%, the Nasdaq index lost 0.80% and the broader S&P 500 index dropped 1.10%.
Like the day before, noted Patrick O’Hare, of Briefing.com, Wall Street remained oriented by soaring bond rates, which are in line with forced march on the new monetary policy expectations of the Fed.
Investors now see the institution raising its key rate by 2 percentage points by the end of the year, against 1.25 points a month ago.
The yield on 10-year US government bonds stood at 3.56%, a first for 11 years.
As for the 2-year rate, which better reflects monetary policy expectations, it was only a breath away from the symbolic threshold of 4%, which it has not crossed since October 2007.
Saved from another session in the red on Monday by a hunt for bargains, the technology sector bent again under the weight of this explosion in bond rates.
Very dependent on financing credit conditions to support its growth, tech is more sensitive to their tightening than other areas of activity.
Amazon, Alphabet, Meta or Nvidia were all in bad shape. Only Apple was doing well, with analysts at Wedbush Securities reporting the “rapid” pace of sales of the new iPhone 14, which hit the market late last week.
The other topic of concern of the day was obviously the meeting of the Fed’s Monetary Policy Committee, which is being held on Tuesday and Wednesday in Washington.
Operators are counting, more than ever, on a 0.75 percentage point increase in the US central bank’s key rate, which would bring it to a range of 3% to 3.25%.
“The Fed continues to make the market nervous,” commented Peter Cardillo of Spartan Capital. For the analyst, more than the rate, investors are waiting for the press release and the press conference by Fed Chairman Jerome Powell to look for “clues on the next movement”.
“As long as this uncertainty is not lifted, the market will continue its momentum and alternate ups and downs over the sessions,” warned Peter Cardillo.
The New York market is also sensitive to corporate earnings warnings, “which are beginning to become more frequent,” noted the analyst.
Monday, after the stock market, Ford Motors (-9.45% to 13.52 dollars) reported that its third quarter results should suffer from a billion dollar increase in costs. The manufacturer nevertheless confirmed its forecast for net profit before tax and interest for the full year.
On Friday, the courier group FedEx (-1.63% to 160.24 dollars) had already published, in advance, results below expectations, citing a slowdown in its volumes around the world.
On the rating, the specialist in technology applied to the health sector Change Healthcare jumped (+ 6.71% to 27.18 dollars) after the validation, by a federal judge in Washington, of its takeover by UnitedHealth (-1, 40% to 516.24 dollars), which the US Department of Justice wanted to prevent for fear of distortion of competition.
Ford’s warning weighed on its great rival General Motors (-4.87% to 39.38 dollars).
The sports equipment manufacturer Nike fell (-3.40% to 103.56 dollars) after a lowering of the recommendation of analysts at Barclays, citing too high stocks and a slowdown in demand in China.
The weather remained cloudy for the universe of cryptocurrencies, in this context of generalized caution, and Coinbase (-3.63%), Block (-1.68%) or Riot Blockchain (-2.53%) paid the price. .
© 2022 AFP
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