(New York) Wall Street was hesitant on the trend to follow at the opening on Tuesday, as market participants retreated before an intervention by the president of the American central bank (Fed), Jerome Powell, in Congress.
Around 9:45 a.m. EST, the Dow Jones was down 0.08% and the S&P 500 was down 0.06% while the NASDAQ was up 0.14%, with the indices fluctuating around equilibrium since the start of trading.
The New York Stock Exchange had already finished close to equilibrium on Monday, with investors not wanting to commit before knowing what Jerome Powell might say to the Senate committee before which he must testify Tuesday from 10 a.m. ballast). They are on the lookout for any indication of the central bank’s next decisions.
“He will likely say that the Fed has made progress in reducing inflation, but that it still has work to do, that it remains committed to bringing inflation back to its 2% target, and that an overly tight labor market poses a risk of persistent inflationary pressures due to wage pressures,” says Patrick O’Hare of Briefing.
“None of this would be surprising to the market based on Mr. Powell’s past remarks,” he adds in a note. “That’s why we think the market can handle today’s testimony as long as the Fed Chairman doesn’t look like he’s opening the door to a much higher terminal rate than the market expects. expect today. »
The terminal rate is the level to which the Fed will raise its rates. The great game of investors today is to guess how far they will go. In view of recent figures on inflation, which remains high, consumption, which remains solid, and unemployment, which remains very low, this figure is constantly being raised.
Chris Low of FHN Financial pointed out, however, that the Fed Chairman’s hearings before Congress are also an opportunity to discuss regulatory and budget issues.
“He won’t focus as sharply on the direction of market interest rates as he would at a press conference” following a meeting of the Monetary Policy Committee, he noted in a note.
On the stock side, airlines JetBlue and Spirit took 1.85% and 1.00% respectively as, according to US media, the Department of Justice is preparing to launch a formal process to oppose their merger .
Meta, the parent company of Facebook and Instagram, rose 1.61% after a Bloomberg report citing job cuts beyond the 13% workforce reduction announced in November. Its boss, Mark Zuckerberg, had promised in early February that 2023 would be “the year of efficiency”, suggesting that further cuts could come.
Electric pickup maker Rivian, struggling to ramp up production, fell 9.49% after announcing plans to market $1.3 billion worth of bonds.
WW International, which offers Weight Watchers diets, jumped 25% after announcing the acquisition of the company Sequence, which offers online consultations with weight management specialists.