(New York) The New York Stock Exchange was moving very slightly in the green on Wednesday after three days of losses for the broader S&P 500 index as investors reassess the prospects of interest rate cuts.
The Dow Jones index advanced 0.30%, the technology-dominated NASDAQ was stable (+0.01%) and the S&P 500 rose 0.14% around 10 a.m. (Eastern time).
On Tuesday, Wall Street ended up in disarray in the face of the rise in bond rates and cautious remarks from the president of the American central bank (Fed).
The Dow Jones gained 0.17% to 37,798.97 points, the NASDAQ index lost 0.12% to 15,865.25 points and the S&P 500 dropped 0.21% to 5,051.41 points.
At this rate of decline since the beginning of April, the S&P and the NASDAQ are on track to experience their worst month since September 2023.
Bond rates which had risen to 4.66% for ten-year bonds, between geopolitical concerns and stubborn inflation in the United States, took a breather on Wednesday.
The yield on ten-year Treasury bills stood at 4.61%, while the dollar, which jumped to its highest since November, gave up some ground against the European currency at 1.0642 euros (0 .22%).
Federal Reserve Chairman Jerome Powell (Fed) dampened hopes of an imminent rate cut.
During a round table in Washington, he indicated that “the latest macroeconomic data” had “clearly not reinforced (the) confidence” of the members of the institution regarding the return of inflation towards its long-term objective. term, or 2% per year.
“It will probably take longer than expected to achieve this confidence,” the Fed president further warned.
For Art Hogan of B. Riley Wealth Management, investors are “re-evaluating their expectations on the evolution of interest rates in 2024”.
These expectations for rate cuts have gone from six cuts at the start of the year to just one potential, recalls the analyst.
But the market accepts these recalibrations relatively well, because the dynamism of the American economy should lead to growth in corporate profits, Mr. Hogan further underlined.
On the stock market, United Airlines saw its shares soar by 10.71% after announcing better than expected results even if it was a quarterly loss of $124 million.
The airline notably suffered the impact of Boeing’s 737 MAX 9 aircraft being grounded for several weeks. United estimates the cost of these measures at $200 million over the quarter.
Boeing was stable (+0.01%) as safety processes on its production lines come under the spotlight in Congress during a subcommittee hearing to hear complaints from a Boeing engineer, whistleblower denouncing breaches.
Eli Lilly Laboratories shares were in demand (+2.79%) after the manufacturer claimed that its obesity drug Mounjaro worked against sleep apnea, reducing 63% of symptoms.
The shares of Resmed, which manufactures masks and respiratory monitors against sleep apnea, were under pressure (-4.65%).
Ford dropped 0.58% as the automaker had to recall half a million cars, affected by a battery charge control failure, likely to cause the driver to lose control.
The insurer Travelers was penalized (-7.15%) despite rising profits in the first quarter, although not up to market expectations. This is the third time in the last four quarters that Travelers has come in below analysts’ forecasts, according to FactSet.
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