New York (AFP) – The New York Stock Exchange opened higher on Wednesday, on a technical rebound the day after a black session that saw the indices plunge after the publication of a higher than expected inflation indicator.
Around 3:50 p.m., the Dow Jones gained 0.40%, the Nasdaq index took 0.58%, and the broader S&P 500 index gained 0.54%.
“We were slaughtered yesterday because the inflation figure was not good and the Fed (US central bank) is probably going to have to raise its rates more than it expected”, explained Karl Haeling, of the bank. LBBW. “And it was so huge that today we have a technical rebound.”
On Tuesday, the Nasdaq lost the fourth most points in its history in one day, while the Dow Jones had its seventh worst session by this metric.
The day after the publication of the consumer price index in the United States, the higher than expected level of which panicked Wall Street, another indicator came to confirm that inflation was far from having said its last word. .
Producer prices, or wholesale prices, certainly fell by 0.1% over one month in August, as expected, but the index excluding food and energy rose by 0.4%, more than expected (0 .3%).
“Producer prices continue to rise at a rapid pace, well above the target” set by the American central bank (Fed) of around 2% inflation, reacted Rubeela Farooqi, of the firm High Frequency Economics.
However, Mr. Haeling noted that Wall Street reacted rather well to the overall figure which, unlike the day before, did not hold any unpleasant surprises.
Analysts nevertheless encouraged to read nothing in the opening of Wall Street more than a technical inflection.
“Operators are still in a state of shock and are trying to understand how far the Fed will go and how low the economy and corporate results will go under the effect of a restrictive monetary policy,” said Patrick O ‘Hare, from Briefing.com, in a note.
The bond market continued to digest the prospect of an even steeper path from the Fed. The yield on 10-year US government bonds rose slightly, to 3.44%, against 3.40% the day before.
The 2-year rate, which is more responsive to changes in monetary policy expectations, hit a new high of almost 15 years, at 3.83%.
On the rating, Starbucks was sought after (+ 4.45% to 91.75 dollars) after the increase, Tuesday, of its growth forecasts for the period 2023-2025. The coffee chain is now banking on a range of 7 to 9% annual increase in its turnover on a like-for-like basis, against 4 to 5% so far.
The railway companies were beginning to feel the wind of the cannonball, two days before a crucial deadline, which could lead to a massive strike by part of the rolling staff. CSX (-2.79%), Canadian National (-0.51%) and Union Pacific (-3.35%) were thus backtracking.
The decision of the cable operator Comcast to double its envelope dedicated to share buybacks, to 20 billion dollars, was welcomed by the New York market (+1.11% to 33.83 dollars).
Despite the timid rebound in the indices, some risk aversion persisted in the market and penalized the cryptocurrency sector in particular, in tune with bitcoin, which has lost nearly 10% since Monday.
The Block payments specialist, heavily invested in the blockchain, the technology on which cryptocurrencies are built, was leaked (-4.71%), as was Riot Blockchain (-2.10%).
By extension, the most volatile values of the rating, among the big names on Wall Street, struggled to recover from Tuesday’s session, like the graphics card manufacturer Nvidia (-1.04%), the specialist semiconductors AMD (-0.84%) and Meta, parent company of Facebook (-1.12%), which again recorded a low on Wednesday since the start of the coronavirus pandemic in March 2020.
© 2022 AFP
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Wall Street opens higher, technical rebound after Tuesday nightmare
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