(New York) The New York Stock Exchange moved up sharply after the opening on Tuesday, reacting positively to the figure for US inflation, yet at its highest in 40 years, while bond rates eased significantly.
Posted at 10:24 a.m.
Around 2 p.m. GMT (10 a.m. EST), the Dow Jones was up 0.86% and the NASDAQ gained 1.92%.
Inflation in the United States in March soared to 8.5% year on year, the highest since December 1981, according to the CPI index published before the opening of Wall Street.
Faced with this “extraordinarily high” level of the consumer price index, in the words of the White House, investors seemed to be concentrating on the underlying index, excluding energy and food prices, which, on the month advanced by only 0.3%, less than expected.
“The big news in this report is that core price pressures finally seem to be easing,” said Andrew Hunter of Capital Economics.
It was gasoline prices, at +18.3% over one month alone, which drove the rise, but analysts are betting on an improvement to come as barrel prices fell from their peaks in March, which were almost 130 dollars a barrel against around 100 today.
“With the current decline in crude oil prices, this trend will be partially reversed in April, and we expect energy inflation to decline significantly over the remainder of this year,” Andrew Hunter said.
On Monday, the stock market indices had widely anticipated the publication of the bad inflation figure which led the American central bank (Federal Reserve, Fed) to accelerate its monetary tightening.
Stock indices had fallen sharply, while bond rates had risen dramatically.
The NASDAQ, with strong technological coloring, had pulled down by dropping 2.18% to 13,411.96 points. The Dow Jones index had lost 1.19% to 34,308.08 points and the S&P 500 1.69% to 4,412.53 points.
Just after the CPI index announcement on Tuesday, bond yields on 10-year US Treasuries, which had hit a high in more than three years at 2.78% the day before, fell back to 2.71%. .
“The session starts higher as the hot reading of price inflation appears to be better than expected,” Schwab analysts noted in a note.
“Markets are looking to rebound from a recent moment of weakness on the looming prospect of an aggressive Fed tightening cycle and the ongoing war in Ukraine,” they explained.
On the stock exchange, eight out of the eleven S&P sectors had returned to the green, with energy in the lead (+2.70%), while crude prices started to rise again.
Shares of energy companies rose, such as Occidental Petroleum which gained almost 4% or Devon Energy which gained 5%.
Banks and real estate remained slightly in negative territory.
The big names in the technology sector rebounded after the fall of the previous day, such as Tesla (+3.55%), Amazon (+1.41%) or Apple (+1.79%).
Meta (Facebook, Instagram), which will test the sale of virtual objects in the metaverse, advanced 1.47% to 219 dollars.
American Airlines was poorly received (-1%), despite a slight upward revision of its revenue forecast. The company also raised its fuel cost forecasts.
The car sales chain CarMax fell 5.20% to 97 dollars, after announcing a result below forecasts and a drop in its sales volume.