(New York) The world stock markets were clearly anchored in the green on Wednesday, satisfied with the decline in inflation in the United States which gives more arguments to a less strict monetary policy of the American central bank.
Wall Street concluded higher, the NASDAQ and the S&P 500 at their highest in a year. The Dow Jones index gained 0.25%, the tech-heavy NASDAQ gained 1.15% and the broader index advanced 0.74%.
In Europe, Paris gained 1.57%, Frankfurt 1.47%, London 1.83% and Milan 1.75%.
Inflation slowed sharply again in June in the United States to 3% year on year, against 4% the previous month, thus reaching its lowest level since March 2021, according to the CPI index published by the Department of Labor.
Although it remains above the 2% target of the American central bank (Fed), the pace was slightly weaker than anticipated by analysts on a few points, in particular concerning underlying inflation, which excludes volatile food and energy prices.
In the bond market, government interest rates fell sharply from near their annual high before the release. The US 10-year interest rate rose to 3.85% around 4:20 p.m. (Eastern time), against 3.97% on Tuesday at the close and the French rate at the same maturity of 3.10% against 3 .21% on Tuesday.
While the markets anticipate that the Fed will raise its key rate by a quarter of a point at the end of its next meeting on July 26, after a break in June, they are increasingly undecided on what the American monetary institution will do next.
“The outlook for inflation is weak enough to suggest that the July rate hike will be the last in the cycle,” assured Karl Haeling of LBBW.
The markets had experienced a “warning shot” and sharp declines last week by noting the determination of the Fed on future rate hikes during the minutes of the last monetary policy meeting, recalled Patrice Gautry, economist of the private banking union.
He also believes that the inflation figure will give more weight to the supporters of a less harsh monetary policy during the next meetings.
This penalized the dollar: it slipped to its lowest level in 16 months against the euro at 1.1137 dollars for one euro, falling 1.16% around 3:35 p.m. (Eastern time). The greenback sank 1.36% against the yen to 138.48 yen, as the Japanese currency was boosted by speculation around a tighter turn from the Japanese central bank.
Infineon and beyond
The European semiconductor sector benefited greatly from a positive assessment by Jefferies in a note.
Infineon gained 3.39% in Frankfurt, STMicroelectronics climbed 4.68% and Soitec 6.59% in Paris, ASM International gained 6.46% in Amsterdam.
On Wall Street, Nvidia, the darling of investors enthusiastic about the artificial intelligence sector, jumped 3.53% to 439.02 dollars.
Degraded European air transport
European airlines were suffering after a downward revision of share price targets by analysts at Deutsche Bank. They point out that “although the idea of a slowdown” in the rise in ticket prices “has not found an echo with the airlines”, they “are nevertheless showing a certain degree of caution”.
Air-France-KLM lost 3.80%, IAG 2.28%, Lufthansa 0.14%.
Domino’s Pizza whets appetites
In New York, the Domino’s Pizza franchise whetted investors’ appetites soaring more than 11% after announcing a deal with Uber to post menus on its meal delivery app.
On the oil side
Oil prices remained on an upward trend.
The price of a barrel of Brent from the North Sea for delivery in September gained 0.89%, to close at 80.11 dollars, crossing the symbolic threshold of 80 dollars, a high for more than two months.
As for the barrel of American West Texas Intermediate (WTI), with maturity in August, it took 1.22%, to 75.75 dollars.
Bitcoin lost 0.87% to $30,310.