(New York) The New York Stock Exchange was trading in the green on Tuesday after new inflation data showed, on the eve of a monetary meeting of the American central bank (Fed), that the rise in prices slowed the last month in the United States.
The Dow Jones index advanced 0.41%, the NASDAQ, with strong technological coloring, gained 0.46% and the S&P 500 took 0.48%, around 10 a.m. (Eastern time).
On Monday, the Dow Jones had gained 0.56% to 34,141 points and the broader S&P 500 index had taken 0.90% to 4359.75 points. The NASDAQ index had climbed 1.53% to 14,915.50 points, its highest level since the end of April 2022.
The CPI consumer price index slowed sharply in May to 4% year on year from 4.9% in April, now at its lowest in more than two years, according to Labor Department figures released on Tuesday just before the opening of the market. That’s in line with analysts’ expectations, and it’s the lowest level since March 2021.
Inflation is now half as high as in July 2022, when it was at its highest, at 9.1% over one year, unheard of for more than 40 years.
Over one month alone, the rise in consumer prices was 0.1% against 0.4% in April, better than expected, mainly thanks to a drop in energy prices.
On the downside, however, underlying inflation (excluding food and energy prices) remained high at +5.3% over one year and +0.4% over the month.
The publication of these figures comes the day before the Fed’s decision on overnight rates, which it has been raising for more than a year to curb inflation. The Fed should leave them unchanged this time around, the markets calculate.
But investors will above all be watching the central bank’s intentions for the coming months through its new projections and the press conference of its president Jerome Powell.
For Paul Ashworth of Capital Economics, underlying inflation being “still high, the Fed should signal tomorrow that it is inclined to raise rates at the next meeting at the end of July”.
For HFE’s Rubeela Farooqi, the Fed’s Monetary Committee should at least “keep rates at their level until the end of the year”.
On the bond market, yields had a first marked easing movement after the publication of the CPI index before moderating their decline. Rates on ten-year Treasury bills were stable at 3.73% and those at two years fell to 4.54% against 4.57% the day before.
On the side, technology stocks led the rise while they are sensitive to more expensive interest rates which affect their access to the financing necessary for their growth.
Software giant Oracle was up 4.33% around 9:50 a.m. EST after reporting better-than-expected results in the 4e quarter with revenue of $13.84 billion.
Tesla gained 1.42%, Netflix +2.19%, Intel +1.19%.
Apple’s stock fell a little (-0.38%) after hitting a new record the day before at $183.79, which brought its capitalization close to $3 trillion.
The graphics card specialist Nvidia, very driven by the demand generated by the development of artificial intelligence, was once again close to the bar of 1000 billion in stock market valuation. Its title rose 1.26% to 399 dollars.
The Coinbase cryptocurrency trading platform, after finishing in the red the day before, picked up again (+2.79%) while bitcoin stabilized at 26,000 dollars (+0.48%).