(New York) The New York Stock Exchange, which had started the session well on Tuesday despite high US inflation, ended in the red before the start of the publication of corporate results.
Updated yesterday at 5:04 p.m.
According to final results at the close, the Dow Jones index, which had taken more than 1% in the morning, ended down 0.26% at 34,220.36 points.
The tech-heavy NASDAQ fell 0.30% to 13,371.57 points and the S&P 500 fell 0.34% to 4397.45 points.
Inflation in the United States soared to 8.5% year on year in March, the highest since December 1981, according to the CPI index published before the opening of Wall Street.
In an initial optimistic reaction, investors focused on the core inflation index, excluding energy and food prices which, over the month, advanced by only 0.3%, i.e. less than expected.
It was gasoline prices, at +18.3% over one month alone, which drove the rise, but analysts expect an improvement to come.
Stock market indices pranced up until mid-session before slowly reversing their course.
“Markets were moving forward this morning because while headline inflation was strong, underlying prices were weaker than expected,” commented Peter Cardillo of Spartan Capital.
“Some thought that meant we could see inflation peaking this summer,” he added.
Bond rates eased to 2.71% from 2.78% the previous day and the dollar even fell for part of the day, despite this level of inflation not observed for forty years in the United States.
On the foreign exchange market, the greenback then regained momentum to end at its highest since May 2020 against the major currencies.
Same pendulum movement observed on the New York market: “the stock market was up most of the day then it turned around,” noted Peter Cardillo.
“I suspect that investors have taken money off the table as we approach the start of the earnings season with the banks on Wednesday,” added the analyst, noting that bank stocks plunged at the end of the session. .
JPMorgan Chase, whose first quarter results are expected on Wednesday, fell 1.13% to 131.50 dollars. Expected Thursday, Citigroup dropped 0.49% and Goldman Sachs 0.36%.
For Kathy Lien, of BK Asset Management, the markets, initially interested in “underlying inflation deemed rather benign, then focused on the fact that the American Central Bank (Fed) made it clear that it was going to drastically raise rates next month.”
Shares of energy companies rose on the back of rising crude prices, such as Occidental Petroleum (+2.11%) and Devon Energy (+3.70%).
The big names in the tech sector, up early in the session, had mixed fortunes: Tesla and Apple gained more than 1% but Facebook (Meta) and Netflix lost as much.
American Airlines rose 0.94% after an upward revision to its revenue forecast. But the airline has also raised its fuel cost forecasts.
Used-car sales chain CarMax plunged 9.59% to $93.28 after announcing lower-than-expected earnings and lower sales volume.
Crude oil prices rose above US$100 a barrel and gold prices also advanced, but that was not enough to prevent the Toronto Stock Exchange’s flagship index from closing lower, at the day before the Bank of Canada’s next interest rate decision.
The Toronto floor’s S&P/TSX Composite Index returned 75.08 points to end the session with 21,715.41 points.
In the currency market, the Canadian dollar traded at an average rate of 79.26 cents US, up from 79.23 cents US on Monday.
On the New York Commodity Exchange, crude oil rose US$6.31 to US$100.60 a barrel, while natural gas rose 3.7 cents US to 6 US$.68 per million BTUs.
The price of gold rose US$27.90 to US$1976.10 an ounce and that of copper rose 7.6 cents US to US$4.71 a pound.
With The Canadian Press