The New York Stock Exchange ended modestly in the red on Wednesday after the US Central Bank expected interest rates to remain close to zero and ahead of the release of quarterly results from Apple and Facebook.
According to final results, the Dow Jones, notably weighed down by Boeing and Microsoft, fell 0.48% to 32,820.38 points. The Nasdaq dropped 0.28% to 14,051.03 points and the S&P 500 lost 0.08% to 4,183.18 points.
“In general, nothing has changed,” commented Peter Cardillo of Spartan Capital Securities of the Fed’s monetary policy meeting. The central bank “remains committed to continuing to buy assets” such as treasury bills, to support activity and lower long-term interest rates.
Jerome Powell, Chairman of the Federal Reserve, also insisted that if inflation was going to accelerate a little above the 2% target because of the recovery, it would be due to “temporary factors” and that shouldn’t trigger a Fed rate move.
“I still think that in the coming weeks, the debate on inflation will start to shake the bond market,” said Peter Cardillo.
On Wednesday, the yields on 10-year Treasury bills, which rise when there is fear of inflation, instead fell to around 1.60% (-0.86%).
After the close, Facebook announced a near doubling of its Q1 net profit to $ 9.5 billion. The stock, which finished up 1.16% to $ 307.10 at the close, climbed 4.64% in electronic trading after the close.
Computer giant Apple was also due to announce its results.
Market players were also preparing to follow with attention, in the evening, Joe Biden’s speech to Congress.
The American president must present an ambitious plan of 1,800 billion dollars for education and assistance to families which he intends to finance by canceling tax cuts for the richest and by increasing taxes on capital income for the wealthiest Americans.
“I think that these expenses will rather be well received by the stock market, but not necessarily by the bond market,” said Mr. Cardillo, who considers that the tax increases on financial gains envisaged are already taken into account by the market. “I don’t believe this derails the market or the morale of investors,” he added.
Among the actions of the day, the title Boeing weighed on the decline of the Dow Jones index. The aircraft manufacturer, which has suffered from the drop in air traffic since the start of the pandemic, reported a net loss of $ 537 million in the first quarter. The action ended down 2.89% to 235.46 dollars.
However, the aircraft manufacturer has relied on the return of deliveries of the 737 MAX and vaccination against Covid-19 to rebound.