(New York) The New York Stock Exchange closed divided on Monday, with the Dow Jones and the S&P 500 weighed down by tension in the bond market alerted by higher manufacturing prices in March.
The Dow Jones index lost 0.60% to 39,566.85 points, the technology-dominated NASDAQ advanced 0.11% to 16,396.83 points, and the S&P 500 index fell 0.20 % at 5243.77 points.
Investors had a mixed reception to a welcome uptick in manufacturing activity in March in the United States.
For the first time in sixteen months, the ISM manufacturing activity index returned to growth at 50.3% compared to 48.1% in February.
If at first glance, this more sustained activity is good news for the economy, on closer inspection it hides an index of prices paid which are clearly increasing, which has caused bond rates to rise.
The price index of the manufacturing index thus soared by 3.3% compared to the previous month, which immediately made operators fear that the Federal Reserve (Fed) would further postpone its rate cuts and retain its strict monetary policy for longer in order to curb inflation.
“This index of prices paid came out much stronger than expected and it has continued to increase since the start of the year,” worried Jack Ablin of Cresset.
“This is one of the signs that could show that inflation is still running,” he said.
Ten-year bond yields soared to 4.32% compared to 4.20% at the last close, the highest in two weeks. Those at two years climbed to 4.71% from 4.62%.
Despite the good news of the acceleration in industrial activity, “the only flaw in the report is this rise in the price index which signals that raw material costs have increased at their fastest rate since July 2022”, also pointed out Matthew Martin of Oxford Economics.
But according to him, given the low order book, demand “should not lead to a lasting increase in prices as we saw during the pandemic,” added the analyst.
On the market, the manufacturer of microprocessors and memories Micron Technology, already on a sustained rise last week, gained another 5.44% to $124.30.
According to tech news site The Information, Microsoft and OpenAI have plans to build a mega-data center that could require millions of chips. AMD gained 1.58%, Intel +0.78% and Microsoft +0.92%.
The shares of the telecommunications company AT & T lost 0.57% to 17.50 dollars while the data of 73 million of its subscribers was leaked, without the company specifying whether it was ‘a hack.
Worried about the rebound in manufacturing prices, equipment and furniture brands have lost ground. Home Depot weighed on the Dow Jones, dropping 4.06%, but the Lowe chain also lost 3.14% and Floor and Decor -2.26%.
Express carrier Fedex, which did not renew its transportation contract with the USPS postal service, fell 3.32%. Its rival UPS, which must take over this contract, fell 0.68%.
Former US President Donald Trump’s media company, listed under the acronym DJT, listed on the stock market last week, collapsed 21.47% to $48.66.
The company disclosed its 2023 results which showed revenue of some $4 million for a loss of $58 million.
The social network Reddit, which took its first steps on the stock market two weeks ago at $34, fell 6.79% to $45.97.