PARIS (Reuters) – The New York Stock Exchange is trading in the red shortly after opening on Friday as bond yields continue to climb after a volatile week marked by concerns over possible monetary tightening by the Federal Reserve to curb inflation and the conflict in Ukraine.
In early trading, the Dow Jones index lost 58.99 points, or 0.17%, to 34,524.58 points and the Standard & Poor’s 500 fell 0.37% to 4,483.38 points.
The Nasdaq Composite lost 0.93%, or 128.817 points, to 13,768.483.
On the government bond market, the yield on ten-year Treasury bills took more than five basis points to 2.7076%, the highest since March 2019.
In their weekly note, Bank of America strategists warned that the macroeconomic situation was rapidly deteriorating and could tip the US economy into recession as the Fed tightens monetary policy.
Minutes of the institution’s March meeting, released on Wednesday, show that the central bank could start shrinking its balance sheet as early as next month and that it plans to do so at twice the pace of the previous phase of “quantitative tightening”.
The continued rise in bond yields is impacting the technology sector (-1.22%), which is particularly sensitive to changes in interest rates.
Microsoft, Tesla and Nvidia yield from 1.19% to 2.81%.
Large banks such as JPMorgan Chase & Co (+0.83%), Wells Fargo (+1.55%) or Citi (+0.72%), which will publish their first quarter results this week, are favored by the rise yields.
(Laetitia Volga, edited by Sophie Louet)
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