(New York) The New York Stock Exchange ended sharply lower on Tuesday, scalded by an indicator showing a still strong American job market, which pushed bond rates to new heights.
The Dow Jones fell 1.29%, the NASDAQ index lost 1.87% and the broader S&P 500 index lost 1.37%.
As in previous sessions, the tempo was dictated by the bond market, which saw the yield on 10-year American bonds catapulted to 4.80%, a first in more than 16 years.
The 30-year rate has also heated up, reaching its highest since September 2007, as has the yield on the 5-year maturity.
The new bout of rate fever was favored by the publication of the so-called JOLTS report on the movements experienced by the labor market in August. He highlighted the rebound in job offers (+7.8% compared to July), which demonstrates the robustness of the American economy.
“The Fed is not going to make a monetary policy decision based on this report, but it nevertheless maintains the risk of a further rate increase” by the end of the year, commented, in a note, Nancy Vanden Houten of Oxford Economics.
Operators now give the same probability to a final increase in the key rate between now and the end of the year as that of a status quo, whereas they saw this hypothesis as very rare just a month ago.
The report “put a drag on bond rates,” commented Tom Cahill of Ventura Wealth Management, who sees the 10-year yield testing 5%. “Afterwards, I think they will lose their momentum. »
But immediately, the analyst emphasizes that the S&P 500 is approaching a major technical threshold, namely the average of the last 200 trading days, from which it is only around twenty points away.
Pushing this threshold downward “would probably trigger a panic selling movement by certain investors or algorithms”, according to Tom Cahill, who nevertheless sees the market regaining support subsequently, if bond rates fall.
On the market, the Novavax laboratory (+8.18%) benefited from the marketing authorization of its new vaccine against the coronavirus.
In the same sector, the title of the American pharmaceutical group Eli Lilly dropped 2.43%. It plans to buy the biotech Point Biopharma (+84.89%) for around $1.4 billion, in order to strengthen its position in cancer therapies, according to a joint press release.
With this operation, Eli Lilly – one of the largest producers of insulin in the world – will acquire a targeted therapy for prostate cancer, using radioligand therapy.
Airbnb suffered (-6.47%) from a note from KeyBanc which estimated that the momentum the platform had enjoyed coming out of the pandemic was running out of steam. On Monday, general manager and co-founder Brian Chesky felt that the time had come to “put the house in order”, citing criticism from users, particularly regarding prices considered too high.
Toronto Stock Exchange
The Toronto Stock Exchange closed on Tuesday at its lowest level since October 2022, victim of a decline which caused even sharper declines in the American markets.
The S&P/TSX composite index on the Toronto floor lost 156.26 points, or 0.82%, to end the session with 19,020.92 points.
The prospect of another interest rate hike from the Fed also put pressure on the Canadian dollar, which traded at an average rate of 72.93 US cents, down from its previous rate. Friday’s average of 73.96 US cents.
The Canadian Press