(New York) The New York Stock Exchange was down shortly after opening on Wednesday, reluctantly welcoming a price index that was satisfactory but did not completely dispel fears of stubborn inflation.
By 10 a.m. ET, the Dow Jones was down 1.12%, the NASDAQ index was close to breaking even (-0.07%) and the broader S&P 500 index was down 0.64%.
Inflation slowed to 2.5% year-on-year in August in the United States, according to the CPI consumer price index, which came out below the 2.6% announced by economists and the 2.9% in July.
However, the core index, excluding food and energy, came in higher than expected, at 0.3% over one month against 0.2% anticipated, largely due to housing expenditure.
Therefore, “it is difficult to imagine a rate cut of half a point [de la banque centrale américaine] “given that the core index is at its highest since April,” Chris Low of FHN Financial said in a note.
Operators have thus recalibrated their projections and now attribute an 83% probability to the scenario of a drop of only a quarter of a point at the end of the next meeting of the American central bank (Fed), Tuesday and Wednesday, against only 49% a month ago.
The yield on 2-year US government bonds recovered to 3.64% compared to 3.60% the previous day at the close.
Despite the climate of caution, the NASDAQ limited its losses.
“The market has been down a lot in recent weeks,” said Adam Sarhan of 50 Park Investments. “So some people are bargain hunting.”
Nvidia was thus sought after (+1.82%), as were its competitors AMD (+0.10%) and Micron (+0.71%) in the semiconductor sector.
While the CPI was the main topic of discussion, operators also discussed the aftermath of Tuesday evening’s presidential debate.
“I don’t think it’s a major point,” Sarhan said.
Democratic Vice President Kamala Harris has done better than her Republican rival Donald Trump, “there’s no doubt about that,” the manager said, “but I think the market is going to do well regardless of the outcome of the election.”
On the stock market, the English football club Manchester United, listed in New York, was penalized (-8.61%) for a new annual loss, quadrupled compared to the previous year. This is the fifth consecutive loss-making year, which nevertheless recorded a record turnover.
Frontier Group, the parent company of low-cost airline Frontier Airlines, gained altitude (+7.77%) after revising its forecasts for the current quarter. The Denver (Colorado) group is counting on lower costs and higher margins.
The banking sector continued to suffer after executives warned on Monday and Tuesday of pressure on several of their businesses, in retail banking and in market activities.
JPMorgan Chase fell by 1.13%, while Bank of America lost 2.34%.
The latter also suffered from a new sale of a block of shares by Berkshire Hathaway, the holding company of Warren Buffett, a major shareholder of the establishment.