(CercleFinance.com) – After opening in the green, the New York Stock Exchange turned downward on Tuesday on profit-taking which particularly affected technology stocks, while Fed officials began to question more and more explicitly the need to lower rates.
At the end of the morning, the Dow Jones lost more than 0.5% to 38,678.8 points, while the Nasdaq Composite fell by 0.4% to 16,191.3 points.
The S&P 500 index achieved a series of historic records at the end of March, thanks to the prospect of a ‘soft landing’ for the American economy accompanied by a rate cut from the Fed.
This index now shows a gain of around 9% since the start of the year.
But several senior Fed officials have recently expressed their doubts about the relevance of monetary easing, particularly in the face of the strength of the job market and the persistence of inflation.
‘It is difficult not to see this as a concerted action to tighten financial conditions a little and send a message to the markets,’ says Alexandre Baradez, head of market analysis at IG France.
In this sense, tomorrow’s publication of monthly inflation figures could tip the scales a little more in favor of a pause on rates.
These doubts are causing some profit-taking on the big technological names on the market which stood out in the first quarter, such as Nvidia (-4%), Meta (-2%) or Netflix (-1.8%).
On Wall Street, ‘hi-tech’ stocks are considered the most sensitive to changes in Federal Reserve rates. Furthermore, the month of May, known to be favorable for profit taking, is starting to approach.
On the upside, Cisco stood out with a gain of more than 2% in reaction to positive comments from Deutsche Bank, which decided to make the network equipment manufacturer’s stock a ‘buy idea’.
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