Wall Street Ends Cautious Up Ahead of Fed

AFP 13/12/2022 9:40pm

The New York Stock Exchange ended cautiously higher on Tuesday, supported by slowing US inflation just on the eve of a Fed interest rate decision.

After starting with a bang at the open following the publication of a better than expected inflation figure, the indices ended on a more moderate rise.

The Dow Jones index gained 0.30% to 34,108.64 points, the Nasdaq 1.01% to 11,256.81 points and the S&P 500 rose 0.73% to 4,019.65 points.

Inflation in the United States slowed more than expected: it stood at 7.1% over one year in November, against 7.7% in October, according to the CPI index published by the American government. Analysts expected 7.3%.

This is the lowest increase in consumer prices since December 2021.

The stock market initially surged, driven by enthusiasm from the tech-heavy Nasdaq, which had started up more than 3%.

This momentum then dried up “notably because Friday will be a day of the four witches”, that is to say the last session of the year which sees the expiry of many stock market contracts which always leads to exuberant volatility. , underlined Peter Cardillo, of Spartan Capital.

“On Wednesday, we are also awaiting the decision of the Federal Reserve and this has led to a lot of profit taking”, assured the analyst again.

Operators are indeed almost certain now that the Fed, which will make its monetary decision at 7:00 p.m. GMT on Wednesday, will increase its rates by only half a percentage point instead of the three-quarters of a point struck four times in a row. on overnight interest rates.

They should therefore go to a level between 4.25% and 4.50%.

On the bond market, yields on 10-year Treasury bills fell to 3.50% from 3.61% the day before and the dollar nosedived. Around 9:00 p.m. GMT, it dropped 0.87% against the euro at 1.0629 dollars for one euro.

“Overall it was a positive session for the stock market,” Cardillo said.

Two-thirds of the members of the Dow concluded in the green and the broader S&P 500 index, the most representative of the American market, finished above 4,000 points. “This means that the end-of-year rebound is still relevant,” assured the Spartan Capital analyst.

On the side, the software giant Oracle, which had taken almost 4% in session, finally concluded in the red (-0.82%) despite quarterly results better than expected.

The Nasdaq was notably supported by Moderna, the vaccine maker, which jumped 19.63% to 197.54 dollars. The laboratory has announced positive preliminary results for its messenger RNA vaccine under development with Merck (+1.78%) against skin cancer.

The big names in technology performed well even if their progress calmed down during the session: Meta (Facebook) gained 4.74%, Amazon and Google more than 2%.

The specialist in electronic signature contracts DocuSign was noticed (+7.32%).

Oil companies have benefited from a sustained rise in oil prices, notably Chevron (+2.23%) but also Exxon (+1.09%) and ConocoPhillips (+1.46%).

Shares of low-cost airline Jetblue tumbled 7.67% to $7.10 after reporting that travel demand appeared weaker than expected in December.