by Sinéad Carew and Bansari Mayur Kamdar
(Reuters) – The New York Stock Exchange ended higher on Tuesday, with the Nasdaq reaching a closing record, while comments from the chairman of the US Federal Reserve (Fed) reassured investors, focused in the middle of week on data on producer and consumer prices.
The Dow Jones index gained 0.32%, or 126.60 points, to 39,558.11 points.
The broader S&P-500 gained 25.26 points, or 0.48%, to 5,246.68 points.
The Nasdaq Composite advanced 122.94 points (0.75%) to 16,511.18 points.
A report published today shows that producer prices in the United States rose more than expected in April, driven by the significant increase in the costs of services and products.
This data dampened traders’ hopes that the Fed would cut rates in September. However, the president of the institution, Jerome Powell, said he considered these data to be “mixed” rather than indicative of “overheating”, noting that the statistics from the previous report had been revised downwards.
Jerome Powell also reiterated that the Fed did not plan to raise rates further, despite the decline in inflation, which helped to reassure the markets.
“The market is becoming increasingly comfortable with the idea of higher rates for longer. The real question lately has been whether a hike is possible and Powell reiterated that is not on the table for the hour,” commented Lindsey Bell, chief strategist at 248 Ventures in Charlotte, North Carolina.
She also noted that stocks rose in parallel with the resulting decline in bond yields.
Investors are now awaiting the release of the US consumer price report on Wednesday to determine whether the higher-than-expected inflation data in the first quarter was ephemeral or part of a worrying trend. .
While a first rate cut was previously considered last March, the persistence of inflation and the resilience of the American labor market have pushed the financial markets and most economists to review their expectations, instead anticipating a drop in rates. rate in September.
Despite everything, the main Wall Street indices are currently showing an increase in 2024, continuing to gravitate close to records set earlier this year, driven by corporate results above expectations and by the prospect of seeing, early or later, the Fed lowers rates.
The gains on Wall Street on Tuesday were supported in particular by Alphabet, Google’s parent company, which gained 0.7% after unveiling its latest innovations in the use of artificial intelligence (AI) through its services.
Home Depot lost 0.1%, after falling 2% earlier in the session, after reporting a larger than expected decline in its quarterly sales.
Alibaba fell 6% following the publication of a sharply lower quarterly profit.
While American President Joe Biden announced a set of reinforced customs duties targeting Chinese imports, including electric vehicles, the Chinese manufacturer Li Auto ended up in the red. Tesla grew by more than 3%.
(Written by Jean Terzian)
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