May 3, 2022

Stocks fluctuated on Wall Street on Tuesday to end slightly above breakeven as they started the session, nervously awaiting the U.S. central bank’s monetary decision (Federal Reserve, Fed), which is expected to raise interest rates on Wednesday.

The Dow Jones index climbed 0.20% to 33,128.79 points, the tech-heavy Nasdaq gained 0.22% to 12,563.76 points and the S&P 500 rose 0.48% to 4,175.48. points, depending on final results.

10-year bond yields, which touched 3% for the first time in four years on Monday, held steady at 2.97%.

The session struggled “to find direction ahead of the Federal Reserve’s monetary policy decision tomorrow (Wednesday),” Wells Fargo analysts commented.

“The first 50 basis point (0.50 percentage point) rate hike since 2000 is expected to be announced on Wednesday followingnoon as the central bank aims to quell the highest inflation in more than four decades” , they recalled.

It would indeed be the first turn of the screw of this magnitude in more than 20 years to drive up overnight rates to a level between 0.75% and 1%.

The Fed intends to curb inflation with a series of increases in the cost of credit this year.

Price inflation rose further to 6.6% year on year in March in the United States, a 40-year high, according to the PCE index, the measure preferred by the Fed.

Nervous traders “cleaned up their positions before the Fed,” said LBBW’s Karl Haeling.

“The market remains very turbulent, the VIX index is still around 30 points, there will be other big moves,” added the analyst, referring to the VIX index, known as the “fear index” which testifies market volatility.

“There is real uncertainty and people have different opinions on what the market is going to do following the Fed raises rates and announces quantitative tightening,” Karl Haeling explained.

“Some are saying the market is going to have a relief rally and others are saying the rate hikes are going to be really tough and the market is going to sell off. It’s a huge mix of views and uncertainties,” he concluded.

At the same time, the earnings season continued in full swing. So far, more than 80% of S&P 500 companies reporting results have reported better than expected results.

The American pharmaceutical group Pfizer has thus announced a turnover of 25.7 billion dollars in the first quarter, a sharp increase of 77% over one year, largely thanks to the sales of its vaccine once morest Covid-19. The stock rose 2.01% to $49.31.

The Biogen laboratory slipped 0.78% to 205.70 dollars, following announcing that its chief executive Michel Vounatsos would leave his post following a major setback on its drug once morest Alzheimer’s which forced the group to cut its costs. .

The American cosmetics group Estee Lauder fell 5.86% to 245.37 dollars, following drastically lowering its revenue and profit outlook due in particular to the confinements in China, which lead to store closures and supply problems.

The travel site Expedia, listed on the Nasdaq, plunged 14.02% to 150.31 dollars, following poor results. Expedia suffered a loss of $122 million, or 48 cents per share, when analysts expected a loss of 27 cents per share.

As for its turnover in the 1st quarter, even if it doubled to 2.25 billion dollars compared to the same period of 2021, it also fell below expectations.

The Airbnb accommodation rental platform, on the other hand, saw its title jump following the close of trading (+4.63%). The group has revised upwards its sales forecast for the second quarter and has also managed to significantly reduce its loss in the first.

The title of the car rental company Avis-Budget rose 1.68% to 285.28 dollars, thanks to a turnover up 77% and a profit of 529 million dollars, once morest a loss at the same time. the previous year.

Nasdaq