Wall Street Opens Lower as Investors React to Fed Chairman’s ‘Hawkish’ Statements

2023-06-23 13:57:48

PARIS (Archyde.com) – Wall Street opened sharply lower on Friday as investors continued to price in “hawkish” statements from Federal Reserve Chairman Jerome Powell.

The publication of the American PMI activity indicators, which will take place after the opening, also encourages caution.

In early trading, the Dow Jones index lost 231.60 points, or 0.68%, to 33,715.11 points, the Standard & Poor’s 500 fell 0.82% to 4,345.75 points and the Nasdaq Composite lost 1 .09%, or 148.76 points, to 13,481.85 points. Before the Financial Services Committee of the House of Representatives, Jerome Powell reiterated Thursday that he would proceed with two additional rate hikes.

On the same day, Treasury Secretary Janet Yellen also said that if a recession was not the scenario she favored, a slowdown in consumption would probably be the price to pay to bring inflation back to target. Such a slowdown would be a bad sign for American activity, which is highly dependent on private demand. The PMI activity indicators, which will be published at 1:45 p.m. GMT, will also be closely scrutinized, in particular that of services: this indicator is so far in expansion territory, but the sector explains a good part of the persistence of inflation. “Maintaining a hawkish stance by the Fed (…) increases the likelihood of a policy error, particularly if rate hikes occur before the effects of earlier tightening are fully evident,” strategists say. Janus Henderson.

In values, 3M gained 2.3% at the opening, the group having announced that it had reached an agreement of 10.3 billion dollars (9.49 billion euros) with a set of public players in the management of the water in the United States, which accused the group of pollution linked to “eternal pollutants”, or PFAS.

(Written by Corentin Chapron, edited by Blandine Hénault)

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