(New York) The New York Stock Exchange rose on Tuesday, continuing its momentum, reassured by the slowdown in US inflation which confirms the idea that the Fed should not raise rates on Wednesday.
The Dow Jones advanced 0.43% to 34,212.12 points, the tech-heavy NASDAQ gained 0.83% to 13,573.32 points, and the S&P 500 gained 0.69% to 4369. .01 points, the highest for more than a year.
The CPI consumer price index in the United States slowed in May to 4% year on year from 4.9% in April, the lowest now in more than two years as analysts expected.
Over one month, the rise in consumer prices was 0.1% against 0.4% in April, a deceleration mainly due to the drop in energy prices. “It’s a correct inflation figure, nothing more,” summarized Steve Sosnick of Interactive Brokers.
On the downside, underlying inflation (excluding food and energy prices) remained high at +5.3% over one year and +0.4% over the month.
The publication of this index comes the day before a decision by the US central bank (Fed) on interest rates. For the first time in more than a year, it should stop raising them, calculate the markets.
But investors will above all be watching the Fed’s intentions for the coming months through its new projections and the press conference of its chairman Jerome Powell.
For Paul Ashworth of Capital Economics, underlying inflation being “still high, the Fed should signal tomorrow that it is inclined to raise rates at the next meeting at the end of July”.
On the bond market, yields had an initial easing movement before rising again. The ten-year rates rose to 3.81% against 3.73% the previous day and those for two to 4.66% against 4.57% around 4:30 p.m. (Eastern time).
On the stock exchange, the software giant Oracle ignited at the start of the session (+4.33% after the opening) after announcing better than expected results in the 4e quarter. But the improvement fizzled, the title ending stable (+0.21%).
Apple’s stock fell a little (-0.26%) after hitting a new record the day before at 183.79 dollars, which brought its capitalization close to 3 trillion dollars.
Graphics card specialist Nvidia has once again crossed the $1 trillion mark in stock market valuation. Its stock rose 3.90% to $410.22.
The momentum has also once again spread outside of tech. Thus, travel stocks in particular had the wind in their sails.
Airline UAL gained 3.66% as a pay deal with pilots was close to being signed, according to reports from Bloomberg News. Delta, Southwest advanced more than 3% as well.
Cruise passengers have also benefited. Carnival (+4.21% to 15.34 dollars) reached a high of the year, as did Norwegian Cruise (+5.76%) and Royal Caribbean (+2.39%). These stocks, however, remain well below their pre-pandemic level.
“So far this bullish movement has remained very narrow, driven by only a few technology stocks. But now investors are looking beyond those values,” the Interactive Broker analyst commented.
Highly volatile GameStop stock soared 10.91% as new chairman Ryan Cohen acquired $10 million worth of titles from video game stores. Ryan Cohen, who already owns 12% of GameStop, bought these approximately 440,000 titles between $22.25 and $22.90, according to an SEC document. The stock closed at $26.95.
Toronto Stock Exchange
Gains in the energy and base metals sectors helped the Toronto Stock Exchange close higher late Tuesday morning, as the Canadian dollar crossed the 75 cent US mark. Major US equity indices also advanced modestly ahead of the US Federal Reserve’s interest rate decision, due tomorrow.
The Toronto floor’s S&P/TSX Composite Index gained 69.09 points to end the session with 19,990.40 points.
In the currency market, the Canadian dollar traded at an average rate of 75.13 cents US, up from 74.82 cents US on Monday.
The Canadian Press