(New York) The New York Stock Exchange rallied on Tuesday after five sessions of losses, seeming reassured by the resolute attitude on inflation, but optimistic on the US economy of the president of the Fed, Jerome Powell, in front of the Senate.
Updated yesterday at 4:50 p.m.
The Dow Jones index, which had started in the red, ended up 0.51% to 36,251.02 points, according to final results at the close.
The NASDAQ, which had lost 3.5% over one month, climbed 1.41% to 15,153.45 points.
The S&P 500 advanced 0.92% to 4,713.07 points.
“The market turned upwards in the wake of the testimony of the President of the Fed during his confirmation hearing” for a second term at the head of the American Central Bank, noted Schwab analysts while the meeting was in pain begin.
“Mr. Powell suggested a soft landing” on the monetary front, they said.
During this hearing, the president of the Central Bank, who should be confirmed in his post, promised “to do everything possible” to fight inflation in the United States.
“We will use our tools to support the economy and a strong labor market and to prevent inflation from taking hold,” he said.
Without further details, however, he resolutely charted the course of monetary tightening on the horizon with “a rate hike several times this year and perhaps […] the start of the Fed’s balance sheet reduction.
“This is the clearest signal he has given us that rates will likely increase in March,” said Shaun Osborne of Scotiabank.
Mr Powell acknowledged that inflation could be high “well into the middle of the year”.
Pressed by senators concerned about this price hike, he assured: “If we see inflation persist at high levels for longer than expected, if we have to increase interest rates further over time, we will. “.
At the same time, the boss of the Fed hopes this year “for a return to normal conditions in the supply chain”, one of the main causes of inflation.
In addition, he says raising rates should not have a negative impact on the job market as the economy “recovers incredibly quickly” from the crisis caused by the pandemic.
Bond yields, which had climbed the previous day to 1.80%, a two-year high, stabilized at 1.74%.
So-called growth technology stocks sensitive to rising rates reacted very positively, with a notable rebound by the NASDAQ.
The big names in tech have risen vigorously: + 1.68% for Apple, + 1.43% for Facebook (Meta), + 2.40% for Amazon.
While before Jerome Powell’s intervention, 10 of the 11 S&P sectors were in the red, they were down to three slightly in negative territory at the close.
On Wednesday, investors will watch the US inflation figure for December. Many analysts expect 7% over one year, after 6.8% in November.
Heavyweight of the Dow Jones, Boeing soared (+ 3.19% to 215.99 dollars) after a positive result of its orders in 2021 to 535 aircraft, which allowed it to beat on the wire the European aircraft manufacturer Airbus.
The plan to buy Zynga by the American video game group Take-Two Interactive, announced on Monday, continued to carry the title of the icon of mobile games (+ 4.86% to 8.85 dollars). That of Take-Two, which had been roughed up the day before in reaction to the announcement of this buyout valued at $ 12.7 billion, rebounded (+ 3.80% to $ 148.42).
The onset of earnings season, which begins with banks on Friday, prompted new estimates from the quarterly accounts that favored some sectors.
Genetics medical services group Illumina jumped 16.98% to $ 423.80 after reporting sharply higher preliminary annual results.
The drugstore and pharmacy chain CVS gained 0.90% after significantly raising its earnings forecast for the fourth quarter and 2021.
Abercrombie and Fitch’s stock rose 7.88% to $ 34.90 after indicating that its 2021 revenue would be nearly 20% higher than in 2020. But the clothing chain also warned that ‘she was experiencing inventory problems and delivery delays.
The Toronto Stock Exchange on Tuesday recorded its best session since the start of the year, as the price of crude oil crossed the threshold of US $ 80 per barrel and reached its highest level in two months.
Toronto’s S & P / TSX Composite Index climbed 202.49 points to 21,274.81 points.
In the currency market, the Canadian dollar traded at 79.33 cents US, up from its average rate of 78.87 cents US the previous day.
On the New York Commodities Exchange, the price of crude oil rose US $ 2.99 to US $ 81.22 per barrel, while that of natural gas rose 17 cents US to $ 4.25 US per million BTUs.
The price of gold advanced US $ 19.70 to US $ 1,818.50 an ounce, and that of copper rose 7.7 cents US to US $ 4.43 per pound.