The New York Stock Exchange concluded with a sharp rebound on Thursday, pleased by inflation which is slowing in the United States and which suggests that the Fed’s rate hike cycle is nearing an end.
The Dow Jones index gained 1.14% to 34,029.69 points, the tech-heavy Nasdaq climbed 1.99% to 12,166.27 points and the broader S&P 500 index to its highest since February. , advanced 1.33% to 4,146.22 points.
On Thursday the US Department of Labor released the PPI producer price index for March which showed wholesale prices fell 0.5% on the month.
This is their largest decline in three years, mainly due to a decline in energy prices. Analysts were expecting stable prices.
Over twelve months, wholesale prices only rose by 2.7% against 4.9% in February. These figures come after the news that the consumer price index (CPI) has slowed over a year to 5% against 6% in February.
“There is certainly a surge of optimism that the end is near of the Fed’s interest rate hike cycle,” the US central bank, LBBW’s Karl Haeling told AFP.
“Inflation is on the downward slope,” he added.
The prospect that the central bank may soon pause its rate hikes also stems from the first signs of a slowdown in US activity. Under these conditions “bad news is good for equities,” commented Edward Moya, analyst for Oanda.
First, there were fears of a “mild” recession following the March mini bank panic, expressed by Fed economists on Wednesday in the minutes of the latest monetary policy.
And then on Thursday, the Labor Department released weekly jobless claims up 11,000 to 239,000.
“With soaring layoffs, the highest for a first quarter since 2005 (…), we can expect job creation to fall to zero by the middle of the year”, said Kieran Clancy, economist for Pantheon Macroeconomics.
After the macroeconomic data, investors will focus from Friday on the results season with the big banks which will be observed under the magnifying glass after the banking difficulties that occurred last month.
“If the deposits in the banks show an erosion or if they communicate badly on the subject, it could hit hard”, warned Karl Haeling.
On the odds, a large majority of Dow Jones values rose, from Visa (+2.05%) to McDonald’s (+1.27%) via Disney (2.86%).
Nine of the eleven S&P sectors finished in the green, with the exception of real estate and utilities.
Delta Air Lines fell 1.10% to $33.37 after reporting another first-quarter loss. But the airline confirmed its targets for the year.
Mega-caps in the technology sector carried the Nasdaq like online retail giant Amazon (+4.67%) as retail sales figures for March in the United States are expected on Friday.
Apple gained 3.41%, Tesla 2.97%.
The manufacturer of Harley Davidson motorcycles, which at the start of the session fell by 4.36%, only lost 1.74% after the announced departure of its financial director hired by the toy manufacturer Hasbro (+ 2.61%).
Tupperware, which had collapsed 50% on Monday, recovered 18.18%. The legendary storage box brand, has warned “it has significant doubts about its ability to continue in business” as its plastic boxes fall out of favor with consumers.