The New York Stock Exchange closed higher on Friday, once again convinced of a soft landing for the American economy and a normalization of inflation.
The Dow Jones gained 0.72%, the Nasdaq index 0.65% and the broader S&P 500 index 0.54%.
The S&P 500 and Nasdaq have just posted five consecutive sessions in the green, with the former just a breath away from its record.
The New York market welcomed the drop in import prices (-0.3% over one month) in August, more marked than expected (-0.2%), but also the conclusions of the monthly survey by the University of Michigan on consumer morale.
The report’s main index rose in September, more than economists expected.
As for American consumers’ inflation expectations, they are at their lowest since December 2020, a sign that the general public believes in a lasting lull in prices.
“Call it what you want, soft landing (for the economy), ideal scenario, the market believes it,” said Steve Sosnick of Interactive Brokers.
Concerned in recent weeks about a sudden decline in the American economy, stakeholders have dismissed this risk in light of the latest indicators.
“For me,” Sosnick said, “the turning point of the week came when (Nvidia CEO) Jensen Huang said at a conference that demand for its chips was strong and people were scrambling to get enough of them.”
These statements reassured Wall Street about the appetite for semiconductors and artificial intelligence (AI).
Nvidia took a break (-0.03%) on Friday, after climbing 12% in ten days, but its major competitors Broadcom (+1.90%), Qualcomm (+1.67%) and AMD (+1.02%) continued their march forward.
Among the giant technology capitalizations, Alphabet also continued its catch-up (+1.82%).
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The market is calmly awaiting the meeting of the American Federal Reserve (Fed) on Tuesday and Wednesday, even if there is uncertainty as to the decision that the institution will take.
He pointed to a report by Wall Street Journal reporter Nick Timiraos, who is known for repeatedly announcing a Fed policy decision before a meeting even begins.
According to him, the members of the Fed’s monetary policy committee are still hesitating between a cut of a quarter and a half percentage point.
The operators have taken this into account and revised their copy, now granting almost the same probability to the hypothesis of a drop of a quarter and a half percentage point.
The bond market also reacted to this development. The yield on 2-year US government bonds eased to 3.59% compared to 3.64% the previous day at the close.
“The uncertainty over the quarter or half point increases the pressure,” Sosnick warned, “because, by definition, half the people are going to be disappointed.”
Boeing fell again (-3.69%) after employees, members of the IAMAW union, overwhelmingly rejected (95%) the draft company agreement negotiated with management, triggering a strike, the first since 2008.
The employees are demanding a 40% salary increase, while the draft agreement only granted 25%.
Warner Bros Discovery (+10.84%) continued to capitalize on the conclusion of a new broadcast agreement with cable operator Charter Communications, which has more than 13 million cable television subscribers.
Creative professional software maker Adobe fell (-8.47%) after its earnings forecast for the current quarter disappointed analysts.
The pharmaceutical group Moderna failed to halt its decline (-2.01%) after revising, on Thursday, its research and development expenses down by 20% for the period from 2025 to 2028.
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