Wall Street down slightly, cautious after the rate hike

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Wall Street down slightly, cautious after the rate hike

New York (AFP) – The New York Stock Exchange was down slightly on Wednesday, cautious about the rate hike and despite the publication of a good US employment figure.

Around 3:05 p.m. GMT, the Dow Jones, which set two records for its first two sessions of the year on Monday and Tuesday, was almost at breakeven (-0.02%), while the Nasdaq lost 0.43% and Extended S&P 500 Index, 0.12%.

At the start of the session, the market remained subject to two opposing forces.

On the one hand, a good part of the technology sector was shunned by investors scalded by the sudden rise, Monday and Tuesday, of US bond rates, which stabilized on Wednesday, at 1.65% for US government bonds at 10 year.

While this shift reflects increased confidence in the long-term trajectory of the US economy, it also signals the start of an increase in credit prices.

However, technological companies often need to invest heavily.

This new context also makes the growth rates announced by these companies a little less attractive compared to the significantly higher interest rates for other investments.

The semiconductor giant AMD (-0.84%) or the software publisher Adobe (-2.96%) were thus in the red.

Faced with this decline in technology, more traditional sectors stood out, primarily finance, which would benefit from an interest rate hike to restore its margins. American Express took 0.85% and Visa took 0.92%.

Another refrain already sung the day before, the oil giants were progressing with the prices of black gold. Chevron gained 1.61%, ExxonMobil 1.71%, and CononcoPhillips, 0.73%.

The producer of iron ore pellets Cleveland-Cliffs (+ 6.48%) or the steel group US Steel (+ 5.67%) were also in high spirits.

On the macroeconomic level, the day got off to a good start with the publication of the ADP cabinet report, which reported 807,000 job creations in December, almost double the 425,000 expected by economists.

“It’s encouraging for Friday’s employment figure,” said Peter Cardillo of Spartan Capital.

The analyst expected a “cautious session”, pending the publication of the minutes of the last meeting of the monetary policy committee of the American Central Bank (Fed), at 19:00 GMT.

“The key will be whether they move towards a rate hike schedule,” said Cardillo. “Investors are no longer worried about Omicron but about the Fed’s decisions.”

The market was hungry for the specialist in plant-based meat substitutes Beyond Meat (+ 4.39% to 64.32 dollars), whose “vegetable chicken” will be marketed, for a limited time, in all. the American restaurants of the KFC chain, the king of fried chicken in the United States.

As for the electric vehicle manufacturer Rivian (-4.19%), he was having trouble with the increase by Ford (-1.83%) of the production targets for the electric version, its star F-150 pick-up, which comes directly into competes with the start-up’s R1T model.

General Motors (-1.84% to 64.53 dollars) must also present an electric version of its own flagship pickup, the Silverado, this Wednesday at CES, the tech show in Las Vegas.

Still in the automotive department, Nikola (+ 9.20% to 11.27 dollars) was riding on the announcement by the USA Truck group of an order for ten of its electric trucks, with an option for 90 additional vehicles.

Another order, of planes this one, from Boeing (+ 1.59% to 217.00 dollars). The low-cost American company Allegiant Air signed for 50 copies of the 737 MAX and asked for an option for 50 additional aircraft of the same family.