Welcoming the status quo of the Fed, Wall Street ends up

The New York Stock Exchange ended sharply higher on Wednesday, welcoming the status quo on interest rates announced by the American Federal Reserve (Fed).

The Dow Jones gained 0.67% to 33,274.58 points, the Nasdaq, with its strong technological coloring, jumped 1.64% to 13,061.47 points and the S&P 500 advanced 1.05% to 4,237.86 points.

For the second time in a row, the Fed left its rates unchanged, in the range of 5.25% to 5.50%, while indicating that it remained “very attentive” to inflation risks.

“President Jerome Powell tried to keep all his options open but he was not convincing,” said Edward Moya of Oanda.

“Certainly (…) he said that inflation was too high but Mr. Powell also indicated that high bond yields would slow down the job market, borrowing and economic activity,” he said. esteemed side Peter Cardillo of Spartan Capital.

In other words, it seems that the high level of bond yields, which influences all other credits, is doing the job of the Fed in the sense that it tightens financial conditions, a factor sought to slow inflation.

“We’ve already had two consecutive pauses in rate increases. If they take another pause in December, it’s over for this cycle,” said Peter Cardillo.

Also for Bryce Doty, portfolio manager at Thornburg Investment, “we now expect this to be the end of the cycle of rate increases.”

The bond market’s reaction was not long in coming, as Treasury bond yields have risen sharply over the past two months driven by the Fed’s high rates and the economy’s insolent strength.

On Wednesday, the ten-year yield fell from 3.48% to 4.75% compared to 4.93% the day before.

This bond rate began to ease on Wednesday after the announcements of refinancing loans from the US Treasury which were in line with what the market expected. The Fed pause did the rest.

On the macroeconomic level, while official employment figures for October are expected on Friday, the private sector alone in the United States created 113,000 jobs, less than expected.

Furthermore, manufacturing activity in the United States continued to deteriorate in October, contracting for the twelfth month in a row, falling further compared to September, according to data published by the professional federation ISM.

The index measuring this activity fell by 2.3 percentage points compared to September, and fell to 46.7%, lower than expected by analysts.

On the value side, almost all sectors of the S&P finished in the green, except energy. Companies in the information technology and communications services sectors led the way. Meta gained 3.51%, Tesla 2.40%, Google 1.81% and Apple, which announces its results on Thursday, 1.87%.

Chip manufacturer AMD soared 9.69% to $108. The group announced, after the closing bell on Tuesday, results and sales in line with forecasts for the third quarter but was more timid than expected on its prospects.

Its big competitor in the artificial intelligence (AI) sector Nvidia climbed 3.79%.

Cosmetics group Estée Lauder collapsed 18.90% to $104.51. Estée Lauder once again suffered from sluggish sales in China. Its turnover in the first quarter of its staggered financial year fell by 10%.

The shared office specialist WeWork, in difficulty for years, fell by 46.49%, now worth only $1.22 while filing for bankruptcy is imminent, according to the Wall Street Journal.