(New York) The New York Stock Exchange opened lower on Wednesday in the wake of a clear tension in bond yields reflecting fears that high interest rates will remain high for longer.
The Dow Jones index lost 0.98%, the NASDAQ lost 0.68% and the S&P 500 dropped 0.77% around 9:50 a.m.
The day before, the indices had finished dispersed, the Dow Jones down 0.55% to 38,852.86 points, and the broader S&P 500 index remained stable (+0.02%) at 5306.04 points.
Driven above all by the enthusiasm around the AI chip specialist, Nvidia (+6.98%), the NASDAQ, on the other hand, had reached a new record at 17,019.88 points (+0.59%).
Investors were selling stocks on Wednesday as yields on Treasury bills soared over the past 24 hours.
Around 9:45 a.m., the ten-year rate stood at 4.57% compared to 4.46% the day before at the start of the session.
Stronger-than-expected American consumer confidence, a mixed reception to the latest Treasury bond issues and strict comments from a member of the Fed have made investors cautious about stocks.
On Tuesday, Minneapolis Fed President Neel Kashkari estimated that no member of the Fed “had completely ruled out the possibility of a rate hike,” noted Chris Low of FHN Financial.
The market will scrutinize the Beige Book in detail in the second part of the session, the Fed’s latest report on the state of the economy before its next monetary meeting on June 12.
Then, on Friday, he will focus on the publication of the PCE inflation index, the preferred measure of the Federal Reserve (Fed) to judge the rise in prices in the United States.
The Central Bank is targeting 2% annually but inflation should still rise to 2.7% in April according to analyst forecasts.
Investors will also be watching the data on household spending and income for April, also published on Friday.
It will be important to see if the increase in consumer spending slows down after +0.8% in March while the Conference Board confidence index has just surprised with its strength (102 points in May compared to 97.5 in April and 96 planned).
On the market, Nvidia, which had reached a record the day before at $1,139, returned 1.49%. And most of the big names in technology followed the trend, from AMD (-3.50%) in semiconductors to Meta (-0.84%), Microsoft (-0.65%) or Alphabet (- 0.90%).
After lowering its financial forecasts for the second quarter, American Airlines took a nosedive (-12.35%) and dragged down most airlines as well as cruise companies. Delta and United fell more than 3%, Southwest Airlines fell 5.70%. Carnival cruises slipped 4.63% and Norwegian Cruise Line 2.58%.
The oil company Chevron lost 0.90% after Hess shareholders approved the buyout of this group for $53 billion.
Its rival ConocoPhillips fell more than 3% on the announcement of the acquisition of Marathon Oil (+8.90%) for $17.1 billion in shares.
The viral and very volatile GameStop stock lost 7.15%. It had swelled by 25.16% on Tuesday as the video game distribution company announced that it had raised more than $900 million by selling 45 million shares.