Wall Street ends in disarray after Fed minutes

After spending most of the session slightly in the green, the New York Stock Exchange concluded in dispersed order on Wednesday, following minutes from the American central bank, the Fed, still determined to continue rate hikes.

The Dow Jones index fell 0.26% to 33,045.09 points and the S&P 500 0.16% to 3,991.05 points while the tech-heavy Nasdaq advanced 0.13% to 11,507.07 points.

The publication of the minutes of the last meeting of the American central bank (Fed) showed that while the majority of the members of the Monetary Committee agreed to slow the rise in rates on February 1 to 25 basis points, “a few uns” favored a half-percentage-point increase in the screw.

“But given the latest economic data since their decision, — namely the strong job creations, the rise in the CPI price index over the month, that of wholesale prices and finally the jump in retail sales — one wonders if the +few+ members in favor of a 50 basis point hike have not become more numerous,” Joe Manimbo of Convera Financial Services told AFP.

Same story at Spartan Capital where Peter Cardillo points out that more and more members of the Fed “are starting to talk about a higher rate hike”.

“That’s what held the market hostage,” said the analyst, referring in particular to the remarks Wednesday morning by the president of the Fed of St Louis, James Bullard.

He said he was in favor of tightening rates more quickly to reach “the terminal level of rates” capable of curbing inflation and which he sees at 5.375%. These overnight rates are between 4.50% and 4.75% today and the next monetary meeting is due in a month.

Friday, investors will also watch the PCE price index for January, the preferred measure of the Fed to assess the rise in prices, still signals Peter Cardillo.

Bond yields, which had calmed down at the start of the session, rose a little while remaining below their three-month high from the previous day.

At 9:20 p.m. GMT, the ten-year rate stood at 3.91% against 3.95% on Tuesday and the two-year rate showed 4.69% against 4.72% the day before but 4.66% at the opening.

Faced with this escape from risk, the dollar, a safe haven, climbed 0.42% against the euro to 1.0603 dollars.

In terms of values, the action of cybersecurity software group Palo Alto Networks jumped 12.50% to 187.75 dollars after announcing stronger-than-expected sales and profit in the second quarter. The company, which thus recorded its third positive quarter after almost ten years of losses, also raised its outlook.

The title of microprocessor giant Intel dropped 2.26% to 25.47 dollars after the group said it was reducing its quarterly dividend to free up cash for investments. The initiative was judged positively at the start of the session.

Despite a smaller than expected loss in the fourth quarter, the cryptocurrency exchange platform Coinbase fell 1.43% to 61.18 dollars while bitcoin dropped 1.59% to 23,813 dollars.

All S&P sectors except materials (+0.68%) and elective spending (+0.52%) ended in the red, starting with real estate, very sensitive to rising rates (-1.02 %).

Energy was also down (-0.77%) in the wake of a fall in crude prices as investors begin to see a slowdown in the economy if rate hikes are more severe.