(CercleFinance.com) – Disappointment on Wall Street: what was supposed to be a rebound session ended with an increase that spared practically no sector, and especially not semiconductors which fell by -3% on average.
The US indices saw their declines range from -0.12% for the Dow Jones, -0.58% for the S&P500 and -1.15% for the Nasdaq Composite. The Russell-2000 lost -1% to 1,948 (it ended at its lowest since February 7 and has now lost more than -3.5% since January 1: the year 2024 is starting to look more and more like 2023 for ‘small Caps’).
The Nasdaq-100 falls -1.24% in the wake of ASML -7%, Autodesk -6%, AMD -5.8%, Lam Research -5.3%, KLA -5%, Micron -4, 5%, Applied Materials -4.4%, Nvidia -3.9%, Broadcom -3.5%… (the ‘SOXX’ sector index drops -3% towards 210.50).
Quite paradoxically, the easing of bond yields did not support ‘technos’, which is quite difficult to explain, unless we consider that the fall of the Dutch ASML is representative of a more global trend affecting American stocks. .
With economic indicators surprising on the rise in the United States, stakeholders are focusing on the resilience of the economy, which would offset the disappointment on the cost of money front.
Investors want to continue to believe that yields – remaining at 15-year highs – will cause only limited damage to the real economy. The day’s economic agenda was empty of any publication and the Fed remained silent the day after Jerome Powell’s statements.
The latter seems to rule out the prospect of a rate cut in June and suggests that only two relaxations would be on the agenda in 2024. Rates would therefore remain above 5.25% for another six months, a much longer hold than during previous rise/fall cycles (the ‘level’ lasts on average six months, nine months maximum for 30 years).
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