The New York Stock Exchange accelerated its fall at the close on Wednesday after the Fed minutes showing that the idea of reducing monetary support as early as this year is gaining ground, although committee members remain divided.
According to final results at the close, the Dow Jones index lost 1.08% to 34,960.69 points. The Nasdaq, with strong technological coloring, dropped 0.89% to 14,525.91 points. The S&P 500 lost 1.07% to 4,400.27 points.
“Sales picked up at the end of the session as minutes from the last Fed meeting show it is preparing to cut asset purchases this year,” Spartan Capital Securities’ Peter Cardillo told AFP, while the stock market, which had started moderately in the red, did not immediately react to the publication of the minutes.
“I am still surprised”, added the strategist of Spartan Capital “because it should not have been negative news”. “I just think the Monetary Committee is an excuse for investors to take some money off the table,” he added.
This sharp decline, for the second session in a row, comes after five consecutive sessions of increases in the Dow Jones and the S&P 500 which pushed these two indices to successive records.
According to the minutes of the Fed’s Monetary Committee meeting on July 27-28, U.S. central bank officials could start cutting back on support for the economy as early as this year, but they remain divided over when. opportune time to start reducing the institution’s asset purchases.
Those in favor of a rapid tightening of monetary conditions, highlight the risks that inflation will continue to accelerate, while more wait-and-see officials still wish to observe the evolution of economic data, particularly with regard to the Delta variant.
At the same time, for Sam Stovall of CFRA, “the conversation reported in the minutes has been rendered somewhat obsolete in the face of changes in circumstances since then, particularly with the Delta variant and its consequences on employment”.
Bond rates on 10-year US debt had barely budged, at 1.26%, as the debate over the timing of a reduction in asset purchases has been on the minds for weeks.
For Schwab analysts, Wall Street’s decline first reflected “lingering concerns about the implications of the Delta variant, continued regulatory repression in China and the fallout from the recent collapse of the Afghan government.”
Safe haven, the dollar was anchored at a high since November against the euro.
All sectors of the S&P, with the exception of consumer products (+ 0.15%), were in the red, starting with energy (-2.40%) while oil prices are in fall for five sessions.
The telephone operator T-Mobile dropped 0.60% to 139.83 dollars after the announcement of the theft of the private data of 7.8 million of its customers in a hack that affected the files of 40 million its past and potential customers.
Despite good results in the second quarter, the title of the chain of Target stores lost 2.78% to 247.58 dollars. Distributor stock has been one of the big winners in the industry so far during the recovery, climbing 40% year on year.
Online broker Robinhood which closed 6.71% was down 6% in post-close trading after reporting its results.
The popular brokerage app lost $ 502 million on revenue of $ 565 million that doubled in one year. These results also show that she made more profits from her trading in cryptocurrencies rather than in stocks.