(New York) The New York Stock Exchange was trading in disarray on Thursday, ready to move forward after having digested the rise in bond yields and a moderation in expectations of rate cuts from the American central bank (Fed).
Around 3:05 p.m., the Dow Jones fell 0.19%, the NASDAQ index gained 0.71% and the broader S&P 500 index gained 0.23%.
The New York market had started the week on the defensive, linked “to the notion that the Fed might not reduce its rates as soon, or as much, as the market hoped”, recalled, in a note, Patrick O’Hare, from Briefing.com.
The yield on 10-year US government bonds thus stood at 4.11%, the highest in a month.
This scenario of a Fed less quick than expected to relax its monetary policy is based, in part, on a series of American indicators higher than expected in recent weeks.
On Thursday, new weekly unemployment claims, the lowest since September 2022, confirmed the general impression of an economy that refuses to bend.
But the stock market now seems to have digested this paradigm shift, according to Adam Sarhan of 50 Park Investments.
Wall Street “had every reason to fall,” he explained. “But instead, we stood still. When a market refuses to go down and stays close to its records,” as is currently the case, “the highest probability is that it will go up.”
The Dow Jones was penalized by the slide of the health insurer UnitedHealth (-3.91%), first weighting of the flagship index (9% of the total), which followed that of its competitor Humana (-11.12%) , author of a warning on results, attributed, for the most part, to higher than expected healthcare costs.
The NASDAQ was supported by the “Magnificent Seven”, the seven technological giants who made the index’s heyday in 2023, including Nvidia (+1.84%), at a new historic record, or Microsoft , approaching the symbolic threshold of 3,000 billion dollars in capitalization.
The semiconductor sector was, moreover, enlivened by the results better than expectations of the Taiwanese TSMC (+7.41%), listed on Wall Street, whose general director, CC Wei, said he was optimistic for the current year, evoking the appetite for so-called generative artificial intelligence (AI).
In the wake of TSMC, Intel (+2.20%), Marvell Technology (+4.44%), AMD (+3.06%) and Broadcom (+2.34%) were at the party.
“There is still a lot of money available, looking for an asset to invest in, and many investors are choosing stocks,” argues Adam Sarhan.
The jump in bond rates, which has brought down the price of Treasury bills (the two move in opposite directions), also moderates the enthusiasm of operators for this market, very popular recently with the prospect of rate cuts.
On the stock market, Apple was gaining ground (+2.35%). The Apple firm announced that it would remove the blood oxygen level detection function from two of its connected watches, which will allow it to continue selling them, despite an unfavorable court decision on Wednesday. .
The Cupertino (California) company also benefited from a note from Bank of America, which now recommends buying the stock, highlighting, among other assets, the potential of Apple in online services.
The American hydrogen specialist (production, storage, transformation) Plug Power plunged (-14.44%) after revealing, Wednesday after the stock market, a share issue plan which could reach up to a billion dollars , while the current market capitalization of the group is only 1.4 billion.
Birkenstock fell (-8.34%), punished for its quarterly net profit lower than analysts’ projections, but also for its comments on the current year, which should be marked by a contraction in its margins, due to investments important.
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