(CercleFinance.com) – Wall Street opened lower on Monday morning, fears of an acceleration of monetary tightening catching up with investors against a backdrop of rising oil prices and bond yields.
At the end of the morning, the Dow Jones fell 0.7% to 32,045.8 points, while the Nasdaq Composite lost just over 1% to 12,015.7 points.
US equity markets are thus continuing their air hole on Friday, which had seen them plunge from 3% to 3.5% in reaction to the ‘hawkish’ speech made by Jerome Powell, the President of the Fed.
The head of the Federal Reserve reaffirmed at the Jackson Hole symposium that the central bank intended to use ‘vigorously’ all its tools to fight inflation.
His particularly stubborn tone (the term inflation was mentioned 46 times in his speech) ended up being considered as the harbinger of an increasingly restrictive trajectory on the part of the institution.
Still penalized by the prospect of an imbalance between supply and demand as winter approaches, the contract for a barrel of Brent from the North Sea rose by 2.3% to 103.3 dollars, while that the US light crude contract climbed 2.6% to $95.5.
Strongest sectoral increase in the S&P 500, and only increase of the day, the energy compartment took 1.7%, in the wake of the rise in oil prices.
Conversely, technology stocks and telecoms, sectors considered to be the most sensitive to interest rates, show the strongest declines, with respective declines of 1.5% and 0.8%.
The yield on 10-year US government bonds remains above 3.1%, a threshold it exceeded last week, as the recovery in oil prices fueled fears of a re-acceleration of the inflation which could lead the Federal Reserve to tighten its monetary policy a little more.
This rise could encourage investors to review their trade-offs in favor of the bond market and to the detriment of equities.
On the foreign exchange market, the euro remains below the parity threshold against the dollar, still penalized by the renewed concern aroused by the economic situation of the Old Continent.
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