(New York) The New York Stock Exchange was trading in mixed order Thursday at the start of the session, the indices being subject to high volatility as the end of the semester approaches which encourages institutional investors to reposition at the last minute.
Around 10:25 a.m. EST, the Dow Jones was up 0.58%, the NASDAQ was down 0.14%, and the broader S
“The last few days we’ve seen the market oscillate between red and green at the open,” said Quincy Krosby of LPL Financial. “But so far the indices are holding up and we are still above the important threshold of 4300 points for the S
Initially, the market had welcomed a series of indicators confirming the strength of the American economy.
Gross domestic product (GDP) growth was revised to 2% year on year in the first quarter in the United States, from 1.3% previously, above the 1.6% expected by some economists.
In addition, new weekly jobless claims fell to 239,000 against 264,000 the previous week.
“This number reminds us that the job market remains tight, which increases the likelihood of a rate hike from (the US central bank) next month,” commented Nancy Vanden Houten, of Oxford Economics, in a rating.
After doubting the Fed’s offensive rhetoric, traders are gradually aligning themselves with its message and now attribute a probability of more than 40% to the scenario of two more rate hikes by the end of the year.
“The market seems to have digested what (Fed Chairman Jerome) Powell said, even if he changed his speech a bit” and on Wednesday raised the possibility of a double hike in July and September, according to Quincy Krosby .
The bond market reacted badly to the prospect of this new monetary tightening.
The yield on 10-year US government bonds soared to 3.85% from 3.70% the day before, the highest in three months.
On the equity side, the New York market was shaken by rebalancing of positions as the end of the semester approached, an important date for institutional investors and portfolio managers.
“You see a lot of weird things at the end of a term,” said Maris Ogg of Tower Bridge Advisors.
“We won’t have a clear picture of the market for a few days and the return of the July 4 weekend”, a national holiday in the United States, added Quincy Krosby.
After a cannonball semester, giant tech caps fell under the effect of profit taking, whether Amazon (-1.02%), Alphabet (-1.20%) or Microsoft (-0, 69%).
Even semiconductor maker Micron suffered (-4.06%), despite better-than-expected results, enthusiastic industry commentary and appetite for artificial intelligence.
The banking sector was in good shape after the US central bank (Fed) released annual stress test results, which were better than last year for all 23 major US banks.
Bank of America (2.60%), Wells Fargo (3.43%) or JPMorgan Chase (2.71%) were all wanted.
In their wake, regional or medium-sized banks also rose, such as the Phoenix brand Western Alliance (2.62%), the Californian PacWest (5.15%) or the establishment of Salt Lake City Zions (1.77%).
Virgin Galactic slipped after its jump the day before (-2.91%), while the space tourism company must take off on Thursday its first commercial flight, with the Italian Air Force as a client, a decisive step for the group founded almost twenty years ago.
The ghost BlackBerry was sought after (11.37%), after having doubled its income over one year thanks to a strategic repositioning which moved the group from smartphones to cybersecurity software in particular.