Published on : 29/08/2022 – 22:38
New York (AFP) – The New York Stock Exchange closed slightly lower on Monday, still in the wake of the downturn on Friday after the hawkish declarations towards inflation from the boss of the Fed, Jerome Powell.
According to final results at the close, the Dow Jones index fell 0.57% to 32,098.99 points, the tech-heavy Nasdaq lost 1.02% to 12,017.67 points and the S&P 500 gave way. 0.67% to 4,030.61 points.
“US stocks have continued to slide after last week’s sharp drop prompted by comments from Fed Chairman Jerome Powell during his Jackson Hole speech,” Schwab analysts said.
“During the Fed symposium, Mr. Powell signaled that businesses and households could ‘suffer’ as the Central Bank continues its aggressive monetary policy and remains firmly committed to restoring price stability,” they said. they added.
Wall Street had wiped out all of its August gains on Friday after Jerome Powell in Jackson Hole, Wyoming, flatly dashed hopes of an easing of monetary policy from the Fed in the near future.
“He appeared determined to use high interest rates and not to cut them quickly in the future, even if it means hardship for households,” explained Patrick O’Hare of Briefing.com.
For the analyst, “Mr. Powell did not throw a glass of water in the face of Wall Street. He poured a bucket of ice water!”
The idea of a higher cost of money in the future with rising rates weighing on the prospects for financing and results of companies, especially in the technology sector, weighed down the indices again, particularly the Nasdaq .
Apple ended down 1.37%, Meta 1.61% and Tesla 1.14%.
The decline in the title of the specialist in customer relations and remote computing Salesforce (-3.04%) weighed on the Dow Jones as well as that of the action of 3M (-2.04%), entangled in multiple lawsuits related to defective earplugs intended for the military.
Overreaction?
But for Spartan Capital’s Peter Cardillo, “Friday’s negative reaction was overblown even though some jitters remained in the market on Monday.”
“The Fed actually didn’t say anything new except that it will continue to fight inflation. We had no indication of what type of hike it was planning for September,” said the AFP analyst who thinks the market should be able to recover from these low levels.
Bond yields on 10-year Treasury bills, which move inversely to bond prices, rose sharply, to 3.11%.
As for two-year rates, at 3.46% in the morning, they reached their highest level since 2007.
The VIX index, reflecting the volatility of the market, has started to climb again since Friday to reach its highest level since mid-July.
All S&P sectors except energy (+1.54%) and utilities such as power (+0.25%) traded in the red on Monday.
Real estate (-0.87%), very sensitive to the rise in interest rates, as well as information technologies (-1.28%) guided the decline.
The economic calendar remained light on Monday as the earnings season draws to a close.
Still digesting the Federal Reserve Chairman’s remarks, investors were preparing to position themselves for the much-anticipated macroeconomic report of the end of the week: the official US employment figures for August, which will be announced on Friday.
After the totally unexpected jump in job creations in July to more than half a million, analysts expect 300,000 new hires in August, a figure that is still solid.
© 2022 AFP