(New York) The New York Stock Exchange ended lower on Wednesday after Fed chief Jerome Powell warned that a – albeit slower – interest rate hike was still in order to stem the tide. American inflation.
The Dow Jones index fell 0.30% to 33,951.52 points, the NASDAQ fell 1.21% to 13,502.20 points and the S
The Toronto Stock Exchange’s flagship index closed lower as losses in the information technology and battery metals sectors outweighed gains in the energy group.
The composite index S
On the New York Commodities Exchange, crude oil rose US$1.34 to US$72.53 a barrel, while natural gas rose 11 cents to US$2.60. million BTUs.
The price of gold fell US$2.80 to US$1944.90 per ounce and that of copper rose US3 cents to US$3.91 per pound.
In a speech before a committee of the United States Congress, the president of the American central bank (Fed) insisted that “inflationary pressures continue to be high”. There is “some way to go to get inflation down to 2%,” the Fed’s target, Powell added.
Most importantly, he indicated that “almost all” members of the Fed’s Monetary Committee “expect that it is appropriate to raise interest rates somewhat further by the end of the year.” Mr. Powell, however, said that these increases would be at “a more moderate pace” than in the past year.
The next Fed meeting will be July 25-26.
“The Fed Chairman has sent a strong signal that the central bank is leaning towards raising rates to rein in inflation,” said Oxford Economics analyst Ryan Sweet.
“The timing is not clear however, so we will wait before adjusting our forecast,” he added, noting that signs of a weaker labor market could indicate that inflation should noticeably moderate.
Andrew Johnson of Interactive Brokers put the decline in the indices into perspective, noting that after a bull market for several weeks, “it was not abnormal or unhealthy that we are witnessing profit taking”.
“It’s also important to put this decline into perspective: even at the session low, the market only returned what it took after the Fed meeting,” where investors reacted positively, pleased with the pause in rising rates, he signaled.
For Scotiabank’s Shaun Osborne, Powell “seems to suggest that the Fed isn’t necessarily ready to raise rates quickly.”
“But the longer it takes, the less likely it is to happen, because by then we may see more of the effects on the economy of past turns of the screw,” he explained.
The reaction of the bond market was in this direction, doubting several rate hikes to come. Bond yields, which initially rose immediately after Mr. Powell’s remarks, stabilized thereafter. By 4:20 p.m. EST, those on the 10-year notes remained at 3.72% like the day before.
On the stock side, the NASDAQ, where technology stocks more sensitive to rising rates are concentrated, which slows down the investments necessary for their growth, led the decline.
Amazon shares fell 0.76% as the US consumer protection authority attacks the online retail giant. The FTC accuses him of having pushed “millions of customers” to renew their subscription to his Prime service almost without their knowledge.
Tesla shares, which were up more than 50% month on month, fell 5.46% to $259 after a downgrade from analysts at Barclays. Electric vehicle manufacturer Rivian lost 6.88% and Lucid 4.27%.
Tech big names like Alphabet (-2.09%) and Microsoft (-1.33%) took a nosedive, not to mention Intel in the microprocessor sector which fell 6%.
Cryptocurrency exchange Coinbase, on the other hand, gained 1.77%, following a surge in bitcoin. The flagship cryptocurrency gained 6.77% to $30,080 around 4:50 p.m. EST, climbing above the $30,000 mark for the first time in two months.