Wall Street closes the last session of a volatile month in small form

(New York) The New York Stock Exchange ended the last session of a bumpy and volatile month in poor form on Tuesday, as inflation concerns continue to preoccupy investors.

The Dow Jones index of star stocks closed down 0.67% to 32,990.12 points. The tech-heavy NASDAQ fell 0.41% to 12,081.39 points and the S&P 500 fell 0.63% to 4132.15 points.

Over the month, after the market turbulence caused in particular by the first rate hike of half a percentage point decided by the American central bank (Federal Reserve, Fed) in early May, the NASDAQ fell by 2%. The Dow Jones and the S&P 500 managed to remain marginally higher.

“The persistent inflation that prompted the Fed to adopt a tough monetary policy recently raises concerns about a slowdown in economic activity and the possibility of falling into a recession,” Schwab analysts summed up.

It was the European consumer price index that again sounded the alarm on Tuesday by posting inflation at 8.1% over one year in May, a record, according to Eurostat.

European stock markets took the hit and at the opening in New York, Wall Street reacted badly to this data before limiting losses.

On the oil side, the prices of Brent (the benchmark European variety) pranced above 124 dollars a barrel, at a level not seen since the beginning of March, inflamed by the announcement of an embargo decided on most of the Russian oil by the European Union.

This price jump encouraged profit taking and oil prices then fell to end the session in disarray.

Sensitive to inflation, the price of Treasury bonds fell, while yields on 10-year notes rose significantly to 2.87% against 2.73% at the last close.

And “hawkish comments from Fed Governor Christopher Waller showed his support for a 0.50% rate hike in upcoming meetings” through September, noted Wells Fargo analysts.

Until now, the markets anticipate only two increases of this order, in June and July.

President Joe Biden’s unusual meeting with Fed chief Jerome Powell on Tuesday in the Oval Office of the White House got the full attention of investors, with runaway inflation being on the menu of the meeting.

Two weeks before a meeting of the Fed’s Monetary Committee and a very likely next sharp rate hike, Jerome Powell refrained from commenting.

As for the American president, he said he wanted to discuss inflation, “his highest priority”, while promising to preserve the independence of the Fed.

Among the indicators, consumer confidence deteriorated slightly in May in the United States, with consumers expecting to spend less in the coming months due to persistently high inflation.

“Purchase intentions for cars, houses, major appliances, etc. have all slowed, likely reflecting rising interest rates,” said Lynn Franco, head of economic indicators at The Conference Board.

“Inflation remains a major concern for consumers,” she added.

Markets will get a taste of the state of the U.S. labor market on Wednesday with ADP’s monthly private sector hiring survey, ahead of official jobs numbers for May due Friday.

Nine of the eleven S&P sectors ended in the red on Tuesday, starting with energy (-1.65%), materials (-1.60%) and real estate (-1.34%).

The Salesforce customer relationship management platform announced a drop in profit, but less sharply than expected. The stock gained 5.62% in electronic trading after the close, when it finished down 2.94% at $160.24.

The manufacturer of computers and printers HP has published quarterly sales better than expected. The stock was down 0.21% after the close.

Chipmaker Qualcomm gained 2.48% to $143.22 as it bids for a stake in semiconductor group Arm in the British maker’s IPO after it was acquired by Softbank in 2016.