(Paris) World stock markets rebounded Wednesday after the announcement of the slowdown in US inflation in July, investors anticipating a softening of the policy of raising key rates of the US Central Bank (Fed).
Updated yesterday at 6:40 p.m.
In New York, the Stock Exchange celebrated the decline in inflation, driven by the technology sector.
The Dow Jones Index gained 1.63%, the NASDAQ jumped 2.89% to its best score since late April and the S&P 500 soared 2.13%, advancing to its highest level in three months. .
The day before, the indices of Wall Street had been sealed by the pessimistic warnings of the manufacturers of semiconductors.
European stock markets closed higher, but more modestly. Frankfurt gained 1.23%, Milan 0.95%, Paris 0.52% and London 0.25%.
Inflation slowed more than expected in July in the United States — thanks in particular to the fall in the price of gasoline at the pump — but remains at a very high level.
Consumer prices rose 8.5% year on year, according to the Consumer Price Index (CPI) released Wednesday by the Labor Department. But inflation over one month is zero, which means that prices have, against all expectations, not increased compared to June.
“The markets have breathed a sigh of relief”, observes Pierre Bismuth, managing director of Myria AM, who however emphasizes that “everything is good to take in August for the markets, especially to get out of the red zone” where find most stock indices since 1er January.
Core inflation, which excludes particularly volatile food and energy prices, also slowed to 5.9% year-on-year, while the markets were expecting it to rise (+6.1 % according to Factset).
“The estimated probability of a 75 basis point Fed rate hike in September has literally collapsed,” said Jochen Stanzl of CMC Markets.
A large majority of investors (58%) are now betting on a Fed rate hike of half a percentage point in September, down from the three-quarters of a point estimated the previous day, according to futures.
However, Pierre Bismuth does not say he is “certain that the Fed is accommodating” in view of these figures which, in the middle of summer, can be considered insufficient to indicate a firm trend.
“The Fed may want to give itself room to maneuver in September by hitting hard” with a 75 basis point hike before the November midterm elections, encouraged by “the robustness of the American economy” and inflation which remains high.
The bond markets reacted positively to the news, with an easing of the rates which passed on to the dollar. The yield on the two-year bills stood at 3.21% against 3.26% the previous day, narrowing the gap with that of the ten-year bills.
On the side of oil and currencies
The dollar lost ground against other currencies after the release of US inflation figures.
Around 7 p.m. GMT, the greenback lost 0.96% against the euro at 1.0311 dollars and lost 1.26% against the pound at 1.2234 dollars.
Earlier, the dollar even dropped 1.32% against the euro at 1.0320 dollars for one euro, its lowest for more than a month.
Consumer prices increased by 8.5% in July year on year, according to the consumer price index (CPI) against 9.1% in June.
Moreover, the situation of the energy market in Europe continued to weigh on the currencies of the Old Continent.
“Energy prices have stabilized” in recent weeks “but remain at worryingly high levels, and have the potential to pick up again” if Russia decides to limit its exports further, warns Derek Halpenny, analyst at MUFG .
Bitcoin rose 2.18% to $23,650.
Technology heals its wounds
After two difficult sessions for technology, weighed down by the semiconductor sector, several titles were picking up, driven by announcements perceived positively by the markets.
Anxious to secure his back in his legal battle with the uncertain outcome concerning the takeover of Twitter, Elon Musk sold in early August for nearly 7 billion dollars of shares in his Tesla automobile group. Tesla shares climbed 3.89% to $883.07, and Twitter shares rose 3.74% to $44.43.
The price of Meta (Facebook) gained 5.82% and that of Netflix 6.16%.
British insurers reassured
The insurers Admiral (+12.63%) and Aviva (+12.21%) were at the party in London, after the publication of half-yearly results which reassured investors, who were recently worried about the impact of inflation on the area.