The New York Stock Exchange has strangely celebrated, ending sharply higher, the rise in interest rates by half a percentage point announced by the US Federal Reserve (Fed) on Wednesday, because this currently precludes a tighter tightening.
According to the final results at the close, the Dow Jones index strengthened 2.81% to 34,061.06 points. The technology leader Nasdaq jumped 3.19% to 12,964.86 points while the S&P 500 rose 2.99% to 4,300.17 points.
“It’s a Wall Street party, bond yields are falling. In the end, the Fed was not so aggressive,” said Joe Manimbo of Western Union.
“This is shown by the fact that the Fed seems to rule out a 0.75 percentage point increase in the future,” the analyst said.
Even if it approved a 50 basis point increase in key interest rates as expected by the markets – which represents a first for more than twenty years – the Monetary Commission (FOMC) seems more skeptical about the possibility of a tighter tightening by 75 basis points. that investors feared.
An increase in interest rates by 0.75 percentage points “is not fixed on paper”, said Fed Chairman Jerome Powell in a press conference after the publication of the commission’s decision.
As a result, overnight rates are set at between 0.75% and 1%, but other 0.50% increases “are on the table for the next two meetings” in June and July. , said Mr. Powell.
“This begs the question for September, we need to look at the data, if inflation is to ease,” the Western Union analyst suggested.
The Fed’s balance sheet will also begin to shrink at $ 47.5 billion a month from June 1 to $ 90 billion three months from now, another way to increase credit costs to mitigate demand and growth. prices.
Yields on bonds fell significantly, ie on two-year bills to 2.63% compared to 2.78% the previous day. The yield on ten-year Treasury bills fell to 2.92% instead of 3% earlier in the session.
S&P’s eleven sectors finished higher in green, starting with energy (+ 4.11%), while crude prices jumped more than 5%, followed by communications services (+3, 68%) and information technology ( + 3.51%).
Airbnb’s rental platform jumped 7.71% to $ 156.18. It increased its sales forecast for the second quarter and managed to sharply reduce its losses in the first quarter.
Starbucks rose 9.83% to $ 81.64. The American coffee giant managed to compensate for the sharp slowdown in its activity in China in the first quarter with a push in the United States, where it wants to increase the development of “drive-in” points of sale, where customers are served in their vehicle.
The title of the manufacturer of the vaccine against Covid, Moderna, strengthened 5.81% to $ 155.05. The lab reported quarterly earnings higher than expected with sales of $ 5.93 billion for the Covid vaccine, its only product.
Uber, a car rental company with a driver and a specialist in meal deliveries, lost 4.65% to $ 28.10 despite doubling its turnover in the first quarter, helped by rising prices. Uber is still losing money, but is betting on continued growth in the second quarter.
The title was also swept away by the fall of the action of the rival Lyft, which plunged 29.91% to $ 21.56. The group reported higher-than-expected losses in the first quarter and said it needed to invest more to strengthen its fleet of drivers.
vmt / dd / cm