Wall Street closes in green on the eve of US inflation data

The New York Stock Exchange closed clearly in the green on Wednesday, driven by technology and betting on a good surprise in American inflation on Thursday.

The Dow Jones index gained 0.45%, the tech-heavy Nasdaq gained 0.75% and the broader S&P 500 index rose 0.57%.

The communication services (+1.17%) and information technology (+1.00%) sectors finished first.

Apart from Tesla (-0.43%), the “Magnificent Seven” started to rise again, including Microsoft shares (+1.86%), Meta (+3.65%), Nvidia (+2.28%) and even Apple (+0.57%) which nevertheless received a third negative analyst rating in a row.

Amazon gained 1.56%. Its subsidiary Twitch, a streaming video game platform, will cut 500 jobs, or 30% of its workforce.

Thursday morning, investors will watch for the publication of an indicator of December inflation in the United States. The CPI price index is expected to have increased 3.2% year-on-year in December, compared to 3.1% the previous month, according to a MarketWatch consensus.

Core inflation, excluding volatile items such as energy or food, should fall to 3.8%, compared to 4% year-on-year in November, according to this median forecast.

“Without any real economic news on Wednesday, I think market participants are coming to terms with the idea that we may have a favorable price index on Thursday,” said Peter Cardillo, analyst at Spartan Capital.

In a speech in White Plains, New York Federal Reserve (Fed) President John Williams blew hot and cold on the Fed’s inflation expectations.

“I think we will have to maintain a restrictive policy for some time to fully achieve our objectives,” he said. “It will only be appropriate to reduce the degree of restriction when we are convinced that inflation is moving towards 2% in a sustainable way,” he added.

At the same time, Mr. Williams considered “the recent indicators very encouraging”.

The stock market indices, which were a little higher in the green before this declaration, then slowed their progress.

For Bryant VanCronkhite, principal portfolio manager at Allspring Global Investments, “if the inflation data does not show that it is slowing, the market will digest that downwards.”

The quarterly results season will begin on Friday with major banks.

Bank of America (-0.09%), JPMorgan (+0.21%) and Wells Fargo (-0.43%) are on the menu.

“There are real risks to corporate profits,” worries Bryant VanCronkhite. “I think that analysts’ forecasts are a little high in general,” said this manager to AFP, inviting stock market investors “to be more cautious than optimistic in the short term.”

Boeing returned to the skyline gaining less than 1% after the action was shaken following the setbacks of an Alaska Airlines 737 MAX which lost a door in mid-flight last week.

Its main supplier Spirit Aerosystems, which manufactures aircraft fuselages, has recovered (+4.49%).

Both stocks remain 7% below their level before the incident, which grounded several dozen planes operated by different companies including United Airlines (+1.03%) for inspections.

The cryptocurrency exchange platform Coinbase weakened (-0.46%) while awaiting the announcement after the market close, by the American financial markets watchdog (SEC), that new bitcoin investment products (ETF ) are now authorized on the market.

This investment product would directly track the price of cryptocurrency and allow a larger portion of the general public to invest in cryptocurrency without having to purchase it directly.

The day before, a hacker had anticipated the SEC’s decision by hacking the institution’s account on X (formerly Twitter).