PARIS (Reuters) – The New York Stock Exchange opened lower on Tuesday despite strong results from companies like IBM and American Express taking a back seat as the first day of the Federal Reserve’s monetary policy meeting began. US (Fed).
In early trading, the Dow Jones index lost 397.31 points, or 1.16%, to 33,967.19 points and the broader Standard & Poor’s 500 fell -1.59% to 4,339.81 points.
The Nasdaq Composite lost 1.78%, or 247.12 points, to 13,608.002.
The downtrend is fueled by uncertainties around the Fed. Investors hope that after the two-day meeting of the Federal Open Market Committee, the money-issuing institution will clarify its intentions for raising rates and reducing its balance sheet.
Four rate hikes are expected by the markets this year, including a 25 basis point increase in March.
“It just seems like the market is reacting to the new reality of tougher Fed policy (…) We probably won’t see anyone taking huge bets before this meeting on Wednesday,” said Dan Eye, chief investment officer at Fort Pitt Capital.
Risk appetite is also dampened by geopolitical tensions in Ukraine, as NATO has placed its forces on high alert and decided to send reinforcements to Eastern Europe amid fears of a Russian invasion in Ukraine.
In the United States, the volatility index, also called the “fear index” is up 10% to 32.8 points.
On the results side, IBM gained 1.5% after a profit and a turnover above expectations in the fourth quarter.
American Express takes nearly 5%, the specialist in means of payment having published Tuesday a quarterly profit better than expected.
General Electric, on the other hand, fell by nearly 6% after reporting quarterly sales affected by supply problems.
The heavyweights of new technologies like Microsoft, Apple and Tesla, which must publish their results this week, fell again, from 0.5% to 1.6%.
(Written by Claude Chendjou, edited by Sophie Louet)
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