(New York) The New York Stock Exchange fell on Tuesday, on the eve of a Fed decision and new data on inflation, while the bond market and the dollar benefited from uncertainties in Europe.
The Dow Jones index fell 0.75%, the NASDAQ fell 0.09% and the S&P 500 lost 0.38% around 10:25 a.m. (Eastern time).
American bond rates, which move in the opposite direction to the price of the bond, fell to 4.44% against 4.46% the day before, showing interest from global investors in safe values.
“The tone is a bit risk-avoidant,” commented Steve Sosnick of Interactive Brokers. “By being global, the US Treasury bond market attracts flows towards safety” given “the nervousness” of European markets after the elections, the analyst told AFP.
“Investors fear that an upheaval on the right […] in the European Parliament weakens the EU’s economic integration efforts, jeopardizes climate gains and forces Europe to be tougher on trade,” explained Art Hogan of B. Riley Wealth Management.
While European markets were in the red, the dollar also played its role as a safe haven.
The greenback inflated significantly against the euro for the second consecutive session. Around 10:20 a.m. (Eastern time), the European currency lost 0.39% to 1.0723 dollars per euro.
Stock indices returned from their record highs the day before for the NASDAQ and the S&P 500.
The Dow Jones was particularly affected with banking heavyweights like American Express (-2.13%), Goldman Sachs (-1.71%) and JPMorgan (2.55%) falling heavily.
Investors are tense as the consumer price index for May in the United States will be released on Wednesday shortly before the end of the central bank’s (Fed) monetary meeting.
The market has no doubt that the Federal Reserve is leaving rates unchanged at their highest level in more than twenty years.
But the Fed must publish new forecasts and investors are watching for any indication of future rate cuts. Not to mention President Jerome Powell’s press conference.
As for inflation, analysts forecast that consumer prices rose 0.1% in May to remain at 3.4% year-over-year, according to MarketWatch.
On the value side, the eleven sectors of the S&P 500 were in the red, starting with banks (-1.29%), but also public utilities (-0.98%), industrial groups (-0 .97%) and the energy sector (-0.76%).
Boeing lost more than 2%, General Electric -1.19%, IBM -1.73%.
Nvidia, the AI chip specialist, remained unfazed (+0.08%).
Apple, which had lost almost 2% the day before, soared 3.16%. The group announced the launch of Apple Intelligence, a new system for optimizing the use of its devices, from iPhone to Mac, thanks to generative artificial intelligence (AI) operated in partnership with OpenAI.
Apple Intelligence will feature in the new version of the iOS 18 operating system.
The consumer credit group Affirm, which allows consumers to pay for their purchases in installments, climbed 5.16%. The stock benefited from the announcement that its deferred payment services will be offered next year on Apple Pay, Apple’s payment service.
The automobile manufacturer General Motors gained 0.83% after raising its dividend by 33% and launching a $6 billion share buyback program.