The floor of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/AFP/SPENCER PLATT)
The New York Stock Exchange ended sharply higher on Wednesday, welcoming the determination of the American Central Bank (Fed) to curb inflation after its rate hike of three quarters of a percentage point in line with market expectations.
According to final results at the close, the Dow Jones climbed 1.37% to 32,197.59 points, the tech-heavy Nasdaq jumped 4.06% to 12,032.42 points and the S&P 500, the more representative of the American market, posted an increase of 2.62% to 4,023.61 points.
The indices had already started the session in the green.
As markets expected, the Fed delivered another sharp hike (0.75 percentage points) to overnight rates, the second in a row of this magnitude, pushing them into a range of 2.25 % to 2.50% to thwart inflation at its highest for 40 years (9.1%).
The Monetary Committee (FOMC) has indicated that a further “unusually large” hike may be needed at the next monetary meeting in September.
But, said Fed Chairman Jerome Powell during a press conference, “at some point it will be appropriate to slow down” the rise in rates, a nuance that appealed to the markets.
“There were no surprises, the Fed remained aggressive,” commented Peter Cardillo of Spartan Capital. “They kept saying inflation was too high.”
“But what the market liked,” the analyst continued, “was the fact that Mr. Powell said they might slow the pace of increases going forward, which doesn’t rule out a rise in 50 basis points” soon.
Same story from Art Hogan of B. Riley Wealth Management who noted that the market “now considered a less aggressive monetary policy when we move from the third to the fourth quarter”.
Calculations based on CME Group futures were now betting 66% on a rise of just half a point in September.
– Soft landing still possible –
As the first estimate of US GDP for the second quarter is awaited on Thursday, Mr Powell assured that the United States was “not in recession” at the moment and that a soft landing for the economy , without hurting the labor market too much, was still possible.
On the bond market, yields on 10-year Treasury bills fell to 2.77% against 2.80% the day before. The dollar fell against the main currencies (-0.68% for the dollar index at 8:30 p.m. GMT) and the euro rose.
The eleven S&P sectors registered largely in the green, starting with communication services (+5.11%) and information technology (+4.29%).
In electronic trading after the close, however, Meta (Facebook), which ended on a jump of 6.55% to 169.58 dollars, fell 1.65% after announcing a fall in profit and turnover. declining for the first time in its history.
Its second-quarter profit fell 36% to $6.7 billion, suffering competition from TikTok and advertiser budget cuts due to poor economic conditions.
But the other Nasdaq megacaps have soared, such as Google (Alphabet, +7.74%) or Amazon (+5.37%) and to a lesser extent Apple (+3.42%) which is due to reveal its results on Thursday.
The big names in the semiconductor sector also had the wind in their sails like AMD (+5.36%) or Nvidia (+7.60%). They benefited from the adoption in the Senate of a bill which provides 52 billion dollars to revive the production of chips, a text which must still be ratified by the House of Representatives.
Heavyweight of the Dow Jones, the aircraft manufacturer Boeing concluded a small increase (+0.11%) after results below forecasts in the second quarter.
© 2022 AFP
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