(New York) The New York Stock Exchange is moving in the green on Wednesday, after the jump the day before celebrating the drop in American inflation.
Around 10:15 a.m. ET, the Dow Jones index was up 0.33%, the tech-heavy NASDAQ was up 0.36% and the S&P 500 was up 0.32%.
On Tuesday, the Dow Jones gained 1.43% to 34,827.70 points. The NASDAQ jumped 2.37% to 14,094.38 points, while the S&P 500 gained 1.91% to 4495.70 points.
After the consumer price index (CPI) published on Tuesday, which remained stable in October, slowing to 3.2% year-on-year, it was the turn of producer prices on Wednesday to show that inflation is cooling. in the USA.
The wholesale price index fell 0.5%, a surprise to analysts who had expected a slight increase. This is the largest decline in producer prices since April 2020.
The news was well received by investors since it reinforces their idea that the American central bank (Federal Reserve, Fed) will no longer need to raise interest rates.
Another indicator showed Wednesday that the economy appeared on track for a soft landing. Retail sales in October edged down 0.1%, less than analysts feared.
In September, this consumer spending jumped 0.9% (figure revised upwards). This had caused tension on bond rates, reflecting fears of overheating activity likely to lead the Fed to further monetary tightening.
“In addition to the encouraging report on inflation […] the decline in consumer spending, after the summer frenzy, will give the Federal Reserve confidence that its restrictive monetary policy is reducing inflationary pressures,” commented Kathy Bostjancic, chief economist for NationWide.
“The economic data of this [mercredi] morning rather reflect prospects of a soft landing for the economy,” judged Patrick O’Hare, analyst at Briefing.com.
Bond yields, which had fallen dramatically on Tuesday with the inflation data, were rallying on Wednesday. The ten-year rate stood at 4.51% compared to 4.44% on Tuesday.
On the political scene, a vote by the US Senate is looming to confirm the extension of the federal budget, approved in the House on Tuesday. This will help prevent paralysis (shutdown) administrative services which could intervene as early as Friday.
The market will also keep an eye on San Francisco on Wednesday, where President Joe Biden will meet his Chinese counterpart Xi Jinping, on the sidelines of an Apec summit, the Asia-Pacific Economic Cooperation.
In terms of values on Wall Street, the department store chain Target soared 18% after beating forecasts for its quarterly sales and results.
On a comparable basis, sales fell by 4.9% year-on-year, while analysts were counting on a decrease of 5.25%. Target said year-end sales are expected to be a little weaker than last year, but less than market projections had predicted.
Nine of the eleven S&P sectors were modestly in the green, led by utilities (+0.97%) and real estate (+0.81%). The recent decline in bond rates has led to a reduction in the cost of home loans which, for those aged 30, has fallen below 8%.
Many banks were up, from Truist (+2.36%) to Citigroup (+1.27%) to regional banks like Comerica (+2.87%) or Western alliance (+1.98%) .