(New York) The New York Stock Exchange was moving slightly in the green on Tuesday after US inflation was a little higher than expected, which casts more uncertainty on the timetable for a rate cut by the Federal Reserve (Fed).
The Dow Jones index gained 0.27%, the technology-dominated NASDAQ advanced 0.49% and the S&P 500 gained 0.44% around 10 a.m. Eastern time.
Nervous the day before the publication of the latest inflation barometer, the indices ended up divided. The Dow Jones gained 0.12% to 38,769.66 points, the NASDAQ index contracted 0.41% to 16,019.27 points and the broader S&P 500 index lost 0.11% to 5,117. .94 points.
On Tuesday, inflation in the United States in February rose again year-on-year to 3.2% compared to 3.1% in January, according to data from the Labor Department.
Driven by housing, gasoline, and even plane tickets, the increase in the CPI consumer price index also accelerated over one month, to 0.4% compared to 0.3%. However, this is in line with what analysts expected, according to the Market Watch consensus.
In the bond market, yields on Treasury bonds rose in response. With stubborn inflation, restrictive monetary policy with its high rates risks lasting longer.
Now the market does not expect a drop in overnight rates until June, or even July, according to CME Group calculations on futures contracts.
The Fed is holding a monetary meeting next week, on March 19 and 20, and any monetary easing seems ruled out.
The rate on ten-year bonds stood at 4.14% compared to 4.09% the day before.
“The Fed Monetary Committee (FOMC) has more arguments to leave rates unchanged”, while they are at their highest level in more than 20 years, in the range of 5.25% to 5.50 %, noted Chris Low, economist for FHN Financial.
“A rate cut in March was already completely ruled out, but today’s CPI data will reinforce expectations for a first cut not before June, at the earliest,” he added.
On the stock market, the IT services giant Oracle (+13%) led the NASDAQ after a better-than-expected profit in the third quarter.
The group’s management indicated that demand was very strong to develop infrastructures dedicated to generative artificial intelligence in companies.
The designer of chips for AI, Nvidia, whose stock had fallen significantly from its historic peak on Friday, was regaining color (+1.50% around 9:55 a.m. Eastern time).
Meta gained 1.54% and Microsoft more than 1%.
Southwest Airlines fell more than 12% as it reassessed its 2024 projections in light of delayed Boeing aircraft deliveries.
The company says it should receive more than half of its 737 MAX orders this year, or 46 aircraft. Southwest is expected to post a loss in the first quarter, but return to profitability in the second.
Boeing for its part lost almost 4%.
The video game platform Roblox dropped what it had gained the day before (-3.83%).