(CercleFinance.com) – Expected to rise slightly, Wall Street finally showed hesitation this Tuesday, while bond yields started to rise again ahead of a speech by the President of the Fed later in the day.
At the end of the morning, the Dow Jones advanced another 0.2% to 37,804.2 points, while the Nasdaq Composite for its part fell 0.1% to 15,878.1 points.
After falling at the start of the morning, US yields continue to rise while recent economic indicators in the United States have made the scenario of an upcoming Fed rate cut less likely.
On the government bond market, the yield on ten-year Treasury bonds has risen above the 4.65% mark, returning to its highest levels since last November.
It is gradually approaching its threshold of 5% reached in October, which constituted a peak since 2007.
‘The fact that bond yields are approaching record highs since the financial crisis is penalizing risk appetite,’ comment Goldman Sachs strategists.
‘The combination of disappointing economic growth and rising bond yields, without improvement in activity, could weigh even more on the stock markets,’ they warn.
The continued rise in bond yields impacts the technology sector, considered particularly sensitive to changes in rates.
Apple thus lost 2% and Tesla lost 2.9% to fall below the $500 billion mark in market capitalization.
AMD nevertheless managed to progress by 1.6% after an increase in recommendation from HSBC, which said it was confident about the group’s prospects in graphics processors for AI.
The high level of yields also prevents stocks from responding positively to good company results.
Morgan Stanley nevertheless stands out with a gain of more than 3% following quarterly results well above consensus, notably due to the good health of its investment banking division, led by IPO.
Bank of America – whose quarterly performances turned out to be more mixed – for its part dropped 3.7% in the first exchanges.
Also in sight, Johnson & Johnson fell by 1.7% in the wake of an unsurprising quarterly publication, which was accompanied by an increase in the quarterly dividend.
Jerome Powell, Chairman of the Federal Reserve, is scheduled to speak at lunchtime at a conference devoted to the Canadian economy, but organized from Washington.
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