Wall Street concludes in disorganized order after the Fed minutes and before Nvidia

AFP, 02/21/2024 at 10:01 p.m. Modified on 02/21/2024 at 10:30 p.m.

The New York Stock Exchange, down throughout the session, finally ended in disarray on Wednesday reacting to a Fed determined to wait even longer before a rate cut while investors watched the results of the mega-capitalization Nvidia.

The Dow Jones index advanced 0.13% to 38,612.24 points as did the S&P 500 to 4,981.80 points while the technology-dominated Nasdaq lost 0.32% to 15,580.87 points.

According to minutes of the Jan. 31 monetary meeting, U.S. Federal Reserve (Fed) officials were divided on when to start cutting rates, but most favored a cautious approach when some consider it risky to start monetary easing late.

The Fed had left its rates unchanged at their highest level in more than twenty years.

For Chris Low, economist at FHN Financial, the “minutes” are overall “quite hawkish” or in favor of maintaining high rates for a while.

“The minutes continue to indicate that the Fed is very cautious and does not want to lower rates too soon,” also estimated Peter Cardillo of Spartan Capital.

“From this point of view, it’s quite hawkish,” he commented, using the vocabulary of monetary specialists who thus describe a strict monetary policy.

Added to this was an issue of 20-year Treasury bonds for $16 billion which received only a weak reception. “This also pushed up bond yields, which was very negative for the market,” Mr. Cardillo commented for AFP.

Ten-year bond rates thus jumped to 4.32% compared to 4.27% the day before.

Finally, the big event of the session was the feverish wait for the quarterly results of the AI chip manufacturer, Nvidia, the darling of the market.

Nvidia shares have gained more than 40% since the start of the year and well over 200% over the past year to become, in value terms, the most traded stock daily ahead of Tesla.

But on Wednesday, awaiting its results after the market close, Nvidia, one of the “magnificent 7” – a group of tech mega-capitalizations including Apple and Alphabet in particular – concluded in a fall of 2.85% to $674.72.

Elsewhere, network cybersecurity specialist Palo Alto Networks fell 28.44% to $261.97 as the company lowered its full-year revenue forecast .

The mid-sized company SolarEdge Technologies, specializing in photovoltaic equipment, saw its stock plummet by 12.18%. It suffered a 65% drop in sales in the last quarter.

In the wake of Palo Alto Networks, several cybersecurity companies dropped out, such as Zscaler (-14.10%), SentinelOne (-12.16%) or CrowdStrike (-9.68%).

The cryptocurrency exchange platform Coinbase fell 6.28% while bitcoin fell (-1.85% around 2:45 p.m. GMT).

The shares of Rivian and Lucid, manufacturers of electric vehicles, were under pressure in electronic trading after the close, losing -3.15% and -2.70% respectively after disappointing results.

The artisanal online sales site Etsy lost 3.85% after the close following results that were worse than expected and despite quarterly sales that were better than expected.

The Walgreens Boots pharmacy chain was sanctioned (-2.51% to $21.75) for having lost its place in the Dow Jones, the index of 30 flagship stocks of the New York Stock Exchange. Walgreens will be replaced by Amazon (+0.90%) on Friday.