(New York) The New York Stock Exchange opened lower on Tuesday, scalded by a new sign of the vitality of American consumers, which raises fears of greater monetary tightening from the Federal Reserve (Fed).
Around 9:55 a.m. (Eastern time), the Dow Jones lost 0.28%, the NASDAQ index lost 1.35% and the broader S&P 500 index dropped 0.79%.
The market tensed up following the publication of retail sales in the United States, which showed an increase of 0.7% over one month in September, well above the 0.3% predicted by economists.
Additionally, the previous two months, July and August, were revised upwards.
Even the core index, stripped of the most volatile components, namely energy, construction materials, automobiles and food, increased by 0.6%, against only 0.1% expected.
“Everyone expects consumers to slow down, but if they keep up this pace, it increases the likelihood that the Fed will raise its key rate in December,” commented Quincy Krosby of LPL Financial.
The day’s statistics propelled bond rates, which had already started to rise again on Monday thanks to a return of appetite for risk.
The yield on 2-year government bonds, the most representative of Wall Street’s expectations in terms of monetary policy, stood at 5.17%, compared to 5.09%, not far from its 17-year high (5 .19%) reached at the end of September.
Rates at 10 made an even more marked jump, to 4.84% compared to 4.70% the day before at closing.
“Movements in the bond market are putting a little more pressure on stocks,” observed Patrick O’Hare of Briefing.com in a note.
Giant capitalizations in the technology sector are having difficulty coping with this new surge in bond rates, which is reducing the attractiveness of their future profits.
Nvidia, the specialist in graphics processors, very popular in so-called generative artificial intelligence, was particularly affected (-6.83%), as well as semiconductor manufacturers AMD (-3.67%), Intel (-3 .88%) or Broadcom (-3.30%).
On the other hand, stimulated by consumption figures, the department store brand Macy’s (+2.65%) and the supermarket chain Target (+0.66%) were moving in the green.
Bank of America advanced (+0.31%), after reporting quarterly results above expectations. The institution offset lower profits from asset management and retail banking with corporate services and markets activities.
In the same sector, Goldman Sachs fell (-1.41%), despite better than expected results, even if they were down over one year. The New York brand has benefited in particular from a resurgence in investment banking and the managing director, David Solomon, said he foresees a recovery in the capital markets.
Ahead of analysts’ estimates, here too, Johnson & Johnson, which even raised its annual forecasts, but was shunned by investors (-0.11%). The New Brunswick (New Jersey) laboratory was driven by the American market (11% growth over one year).
Lockheed Martin capitalized (+1.87%), on results higher than expectations for the entire group, although having disappointed in the aeronautical activity. The Bethesda (Maryland) company notably mentioned lower production of the F-35 fighter plane.
The hotel group Wyndham Hotels & Resorts took off (+11.43%) after the announcement, by its competitor Choice Hotels (-4.21%), of a buyout offer at a price 30% higher on Monday evening in closing. The proposal values Wyndham at $9.8 billion, including debt.
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