(CercleFinance.com) – Wall Street returned to an upward path this Thursday, with the accommodating comments made the day before by Jerome Powell, the president of the Fed, giving investors a taste for risky assets again.
At the end of the morning, the Dow Jones rebounded by 0.4% to 39,296.2 points, while the Nasdaq Composite rose by 0.8% to 16,409.2 points, not far from its absolute record of 16,538.8 points.
The release of mixed economic data did not dampen hopes of a rapid cut in key rates from the Federal Reserve in June, or barely.
The Department of Labor reported this morning that there were 221,000 unemployment claims last week, compared to 212,000 the previous week, a sign of a slight easing in the job market.
Following the reassuring remarks made yesterday by the President of the Fed, investors still expect a large majority (58%) to see a first drop in the cost of credit in June, according to the CME’s Fedwatch barometer.
Powell had already been at the origin of the sharp rise on Wall Street in March by twice assuring that the Fed planned to reduce its rates three times this year.
Caution could, however, limit risk-taking while awaiting employment statistics in the United States for the month of March, which will be released tomorrow.
The main beneficiary of the generalized rebound in stocks, the high technology sector is once again at the forefront of the markets, with an increase of 0.9% for its S&P index.
Among the ‘tech’ heavyweights, Meta gained more than 2.6%, driven by a positive recommendation from Jefferies which raised its price target on the stock due to its lead in advertising applications.
The ‘SOX’ semiconductor index – often at the origin of Wall Street’s progress in recent times – gained 0.7%.
The prospect of a relaxation of the Fed’s monetary policy also affects other sectors sensitive to interest rates, such as real estate (+1.1%).
On the value side, Disney is falling again (-3.3%), the failure of activist investor Nelson Peltz to obtain seats on the board annihilating the chances of a more aggressive strategy on the part of the media group .
The rebound on Wall Street does not lead investors to turn away from bonds, since the yield on ten-year Treasury bonds returns to around 4.34%, nor from gold which continues to peak at absolute highs.
Only the barrel of American light crude oil (WTI) consolidates a little, beginning a decline of 0.2% to 85.2 dollars, following its rise in recent weeks, which does not prevent it from still posting a gain of more than 19% this year.
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