by Chuck Mikolajczak
NEW YORK, Reuters the Federal Reserve (Fed).
The Dow Jones Industrial Average gained 0.02 percent, or 5.14 points, to 32,661.84 points.
The broader S&P-500 lost 18.76 points, or 0.47%, to 3,951.39 points.
The Nasdaq Composite fell for its part by 76.06 points (0.66%) to 11,379.48 points.
The S&P-500 and the Nasdaq ended in the red for a second consecutive day. Only the Dow Jones was slightly in the green, supported by the gains recorded by Caterpillar after the announcement of a preliminary agreement with the union representing the workers of four of its factories.
For the first time since last November, the yield on 10-year US Treasuries rose above the 4% threshold after a survey released today showed that manufacturing activity in the United States contracted in February, while commodity prices rose.
Traditionally tied to expected fluctuations in interest rates, the yield on two-year US Treasuries rose further to 4.881%, after peaking during the session since 2007 at 4.904%.
This is a certain “psychological barrier” for investors, commented Melissa Brown, director of research at Qontigo in New York, in reference to the 4% threshold crossed by bond yields.
More and more traders are anticipating that the Fed will raise its key rate by September to the 5.50%-5.75% range, against the current range of 4.50%-4.75%.
Fueling fears over a still-aggressive monetary policy from the US central bank, Minneapolis Fed Chairman Neel Kashkari said he was open to the idea of a 25 basis point or 50 basis point rate hike. in March.
Wall Street’s major indices, which had shown a solid rebound in January, fell in February amid heightened fears that the Fed would raise interest rates more than initially expected, as the US economy shows its resilience and that inflation does not fade as much as expected.
Investors are now awaiting the release of payroll and consumer price data in the coming days to try to determine what the Fed will do after its March 21-22 meeting.
Most markets are expecting another 25 basis point rate hike.
Among the major sectors of the S&P-500, energy was one of the few to end the session in the green.
On the stock side, Tesla fell 1.43% on the eve of an investor day, while Reuters, citing people familiar with the matter, reported that the manufacturer is preparing a production overhaul of its Model Y. Novavax has plunged nearly 26% after raising doubts about its ability to continue operations and announcing a plan to cut spending.
(French version Jean Terzian)
Copyright © 2023 Thomson Reuters