2023-11-09 21:33:59
An operator of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA / SPENCER PLATT)
The New York Stock Exchange interrupted its series of positive sessions on Thursday, the indices concluding in the red after comments from the head of the Fed, Jerome Powell, indicating that the American central bank “would not hesitate” to raise its rates further if necessary.
After eight days of progression, the broader S&P 500 index, the most representative of the American stock market, lost 0.81% to 4,347.35 points. The Dow Jones slipped 0.65% to 33,891.94 points. The Nasdaq, with a strong technological coloring, dropped 0.94% to 13,521.45 points.
“We will not hesitate” to further raise key rates “if necessary” in the face of high inflation, the president of the American Federal Reserve (Fed) warned on Thursday during a conference at the IMF.
The Fed “is committed to achieving a monetary policy restrictive enough to bring inflation to 2.0%; we are not certain” that this is the case, added Mr. Powell.
On November 1, the Fed, for the second time in a row, maintained its rates in their range of 5.25% to 5.50%.
“What he said wasn’t that bad, it was just a different tone. He only said that if inflation didn’t slow and the labor market didn’t relax, the Fed would consider raise rates,” put Karl Haeling, LBBW analyst, into perspective.
For Evercore economist Krishna Guha either, Mr. Powell’s statements “should not be interpreted as a substantial change in policy.”
However, bond yields were the first to react to these statements, accelerating their rise after two weeks of easing. The ten-year debt rate rose to 4.64% compared to 4.49% the day before around 9:10 p.m. GMT.
That of two-year bonds, even more sensitive to increases in the Fed’s key rates, accelerated further to 5.03% compared to 4.93% on Wednesday.
“Sales of bonds,” whose prices fall when their yields rise, “have extended to stocks,” concluded Karl Haeling.
The tension in bond rates was also explained by the lack of success of an issue of 30-year Treasury bonds for $24 billion. “Demand was very poor,” said Karl Haeling.
On the market, Disney soared 6.90% to $90.33, after the group announced gains in subscribers to its Disney+ streaming service (+7 million) and an increase in its reduction plan costs to $7.5 billion.
The British microprocessor group Arm, a subsidiary of Softbank which recently entered the New York Stock Exchange, fell 5.18% after delivering quarterly sales forecasts lower than analysts’ forecasts.
The space tourism company Virgin Galactic, which had lost altitude (-10.34% to $1.56) on Wednesday, regained height (+18.91%).
The group, which carried out six flights, reported a smaller loss than expected in the third quarter on a turnover of 1.7 million dollars. Richard Branson’s company will also reduce its workforce by 18%, or 185 positions.
The stock of the company NuScale Power collapsed by 33% on the Nasdaq, after the group announced the abandonment of a project to build a small new generation nuclear reactor in the United States.
Brokerage application Robinhood returned 5.20% to $7.93, after its quarterly turnover was lower than expected with an almost 50% drop in orders on crypto-assets.
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