WALL STREET FINISHES IN THE GREEN, HOPES FOR A RATE CUT THIS YEAR

The New York Stock Exchange closed higher on Monday, reassured by the hope of a rate cut from the American central bank (Fed) this year.

The Dow Jones index gained 0.46% to 38,852.27 points, the Nasdaq, with its strong technological coloring, jumped 1.19% to 16,349.25 points and the S&P 500 advanced 1.03% to 5,180.74 points.

Bond rates were trending downward, while a majority of investors believe that the central bank will lower interest rates as early as September, according to the CME Group barometer based on futures products.

The yield on ten-year bonds stood at 4.48% compared to 4.50% on Friday.

“It’s another positive session,” underlined Peter Cardillo of Spartan Capital, while Wall Street has regained color since the end of last week, first due to moderate comments from the Fed and especially after employment figures on Friday.

These showed a slowdown in the American labor market, precisely what the Federal Reserve is looking for to bring inflation back to 2%.

“Corporate results continue to be positive and employment data has reinforced hopes that the Fed will cut rates this year,” added Mr. Cardillo.

The United States economy created fewer jobs than expected in April, at 175,000 compared to 240,000 expected and 315,000 the month before.

The unemployment rate increased slightly, to 3.9% compared to 3.8%.

This cooling of the job market is necessary, according to the Fed, to slow down both the economy and the rise in prices.

For Peter Cardillo, while the week ahead will be sparse in economic data, company results and the direction of bond rates will guide the indices. According to him, the S&P 500 could rise to the level of 5,300 points by the next inflation data, producer prices for April, which will be published on Tuesday May 14.

Among the big names to still disclose their quarterly accounts this week are Disney (+2.47%) on Tuesday and Uber (+3.31%) on Wednesday.

Palantir, the intelligence company that uses AI, soared 8.06% before publishing its results. In electronic exchanges after the close, the stock slipped 5.37% despite the announcement of growth of 21% in its quarterly turnover over one year.

Several members of the Federal Reserve also spoke on Monday, including New York Fed President John Williams. He assured that there would “eventually be a reduction in rates” and that their current level was “in a good position”.

The president of the Richmond regional branch, Thomas Barkin, was optimistic in a speech on the trajectory of inflation, believing that “the full effect of high rates was still to come”.

On the stock market, Apple caught its breath (-0.91%) after Friday’s spectacular surge (+5.98%) which welcomed results that were less bad than expected.

Tesla stock was sought after (+1.97%) after the electric vehicle maker added a new version to its Model Y, its most popular car.

Its competitor Rivian also climbed 2.58%, on the eve of announcing its quarterly results on Tuesday.

Shares of microprocessor and component makers provided momentum to the technology sector, with Nvidia gaining 3.77%, AMD +3.44% and Arm Holdings +5.19%.