(New York) The New York Stock Exchange started sharply higher on Wednesday, cheering on a strong U.S. inflation figure showing that June price growth slowed more than expected to 3% year on year. .
The Dow Jones Index gained 0.84%, the NASDAQ, home to many interest-rate sensitive technology companies, jumped 1.26% and the broader S Index
Inflation marked time in June in the United States at 3% year on year, against 4% a month before and 3.1% expected, according to the CPI index. Over one month, it advanced by 0.2% while analysts expected 0.3%.
So-called core inflation (excluding food and energy prices) fell to 4.8% from 5.3%, which is still far from the 2% target of the American central bank (Fed).
“This moderate rise in consumer prices will not prevent the Fed from raising rates again later this month but it confirms our view that the trend of lower core inflation should continue. ‘accelerate in the second half of the year,’ reacted Andrew Hunter of Capital Economics.
The central bank is expected to raise interest rates again by a quarter point on July 26 to lead them to between 5.25% and 5.50%, according to futures product projections. But the likelihood of another rise in September waned markedly on Wednesday, according to CME Group calculations.
“While it raised rates in July, we expect the Federal Reserve Monetary Committee to hold rates at 5.4% by year-end,” said Rubeela Farooqi, chief economist. of HFE.
Bond yields reacted strongly, dropping sharply to 4.73% from 4.87% the day before for two-year bills and to 3.89% from 3.97% for ten-year ones.
And above all, the dollar slipped to its lowest level in more than a year against the euro at 1.1094 dollars per euro (-0.77%) around 10 a.m. (Eastern time). Against the Swiss franc, the greenback even fell to its lowest level since 2015.
If, as investors speculated in the face of this slowdown in inflation, the Fed only raises rates once this year, this limits the attractiveness of investments in dollars to the benefit of the euro because the European Central Bank (ECB ) is not yet done with its rate hike cycle.
The Vix index, known as the “fear index” because it reflects stock market volatility, was much calmer, falling more than 5% to 14 points.
On the sidelines, with several banking quarterly results expected this week, bank stocks were in demand: JPMorgan gained 1.37% while Bank of America, Citigroup and Wells Fargo gained more than 2%. Goldman Sachs jumped 3.73%.
The big names in technology were also on the rise from Amazon (1.43%) to Meta (1.44%) and Tesla (also 1.44%).
Nvidia, the darling of investors enthusiastic about the artificial intelligence sector, climbed 2.40% to $434.34.
The struggling online car seller Carvana hummed 4.33%, continuing its strong comeback for a month.
But it was Domino’s Pizza that whetted the appetite of investors the most, soaring more than 11% after announcing an agreement with Uber, which will post its menus on its meal delivery application.
