Wall Street appreciates slowing US inflation

(New York) The New York Stock Exchange opened cautiously in the green on Wednesday, after U.S. inflation slowed in March to 5% year on year, the lowest in almost two years.

The Dow Jones Index was up 0.54% around 10:20 a.m. EST. The tech-heavy NASDAQ gained 0.25%, while the broader S

The day before, Wall Street had also remained cautious, closing loosely around the balance.

U.S. consumer price inflation (CPI), a much-anticipated indicator, slowed in March year-on-year to 5% from an expected 5.1%, largely on the back of lower energy prices.

This is its lowest level since May 2021. However, underlying inflation, excluding food and energy, remains tenacious over twelve months at 5.6%, against 5.5% the month before, still due to rising housing and transport prices.

In any case, these data argue for another modest interest rate hike from the Federal Reserve in May, analysts agreed.

But, if the inflation trend continues to decline, some are hoping this could be the near end of the Fed’s rate hike cycle.

Thus on the foreign exchange market, the dollar dropped more than half a percentage point against the euro (at 1.0973 dollars for one euro) as through the Dollar Index which compares the greenback to a basket of currencies.

As for bond yields, they also fell to 3.39% against 3.42% the day before for the 10-year treasury bill and to 3.97% against 4.02% Tuesday for the two-year one.

“ The price index today offered grist for the hawks ”, supporters of a strict monetary policy, “ as for the doves ”, who want it more flexible, summed up the Schwab analysts.

“At 0.1% for the month, the CPI index is below expectations and could fuel the idea that inflation is slowing. But at 0.4%, the advance in the underlying index, excluding food and energy, suggests there is still work to be done for the Federal Reserve as it battles a stubborn price rise,” they added.

Investors will have around 2 p.m. raised rates again despite the mini bank panic.

On the value side, the used car seller CarMax suffered profit taking (4.31%), while it had soared the day before by almost 10% after the announcement of better than expected results at the fourth trimester.

Moderna, the vaccine maker, rebounded 1.20% after dropping 3% the day before, on news that its flu vaccine did not show the expected success.

On the technology side, the cryptocurrency exchange platform Coinbase yielded 1.58%.

Block, the company dedicated to financial transactions, ranging from payment at merchants to payments between individuals, fell by 1.84%. The action of the e-commerce site dedicated to artisans, Etsy, lost 1.60%.

Among the major banks preparing to release their results on Friday, Citigroup (-0.36%) lost some of the ground gained the day before, as did Wells Fargo (-0.24%). JPMorgan Chase was up 0.84%.