Triple record close on Wall Street for indices as inflation slows

Triple record close on Wall Street for indices as inflation slows
Triple record close on Wall Street for indices as inflation slows
An operator of the New York Stock Exchange (ANGELA WEISS)

The three major indices of the New York Stock Exchange broke records at the close on Wednesday, celebrating inflation which slowed slightly in the United States in April, restoring confidence in future rate cuts.

The Dow Jones index gained 0.88% to 39,908 points and the S&P 500 climbed 1.17% to 5,308.15 points, surpassing their records at the end of March. The predominantly technological Nasdaq, after a peak the day before, jumped again by 1.40% to 16,742.39 points.

“This is because of the good news on inflation, which came out better than expected, it even fell a little over a year,” commented Peter Cardillo of Spartan Capital.

The consumer price index in the United States (CPI) turned out to be weaker than expected at +0.3% in April compared to +0.4% forecast by analysts.

Over twelve months, inflation slowed to 3.4% from 3.5%, signaling a first decline since January.

Bond yields reacted by plunging to 4.34% for the ten-year bond compared to 4.43% the day before, the lowest in a month.

The prospect of a rate cut by the American Federal Reserve (Fed) this year was reinforced by this slowdown in price increases, which caused the dollar to fall by 0.66% against the main currencies around 8:00 p.m. GMT.

Another factor helping stocks was “the fact that retail sales were weaker than expected,” Mr. Cardillo also noted.

“This indicates that the consumer is starting to feel the additional cost of high interest rates. If the consumer reduces their spending, this should help curb inflation,” the analyst explained.

Retail sales stagnated in April while analysts expected an increase of 0.4%.

“If we have one or two more months of good news on the inflation side, the Fed will be able to reduce interest rates at least once, maybe twice this year,” Mr. Cardillo said.

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On the stock market, the speculative frenzy on the viral shares of GameStop video game stores and AMC cinemas deflated after three days: GameStop fell 18.79% to $39.59 and AMC lost 20% to 5.48 dollars after spectacular surges where the shares almost doubled.

The Dell computer group climbed 11.23% to 149 dollars while the professional press reported an internal presentation of its new laptop armed with a Qualcomm microprocessor (+ 2.98%) appearing cheaper and less expensive. energy-hungry than those of its rival Intel (+0.71%).

The entire semiconductor sector was at the party, starting with Nvidia (+3.58% to $946.30), AMD (+4.25%) and Taiwan Semiconductor Manufacturing (+2.36%).

Big tech names attracted purchases like Apple (+1.22%), Alphabet (+1.13%) and Microsoft (+1.75%).

Boeing lost 2.03% while the aircraft manufacturer was criticized by the American government for not having respected the conditions of an agreement which was to avoid prosecution after two fatal crashes of its 737 MAX 8 a few months before differences in 2018 and 2019.

The Chinese electric vehicle manufacturer Nio, also listed on Wall Street, collapsed by 8%. Under the Onvo brand, the group launched its first entry-level vehicle in China intended to compete with Tesla’s Model Y while the American administration on Tuesday implemented new customs duties on imports of electric vehicles Chinese.

The regional bank New York Community Bancorp lost 5.66% to $3.66.

NYCB, bailed out in March, which oversees the Flagstar mortgage bank, announced that it would sell $5 billion in outstanding loans to JPMorgan to reduce its balance sheet.

McDonald’s gained 1.21% after announcing it would test a five-dollar meal for a month in order to regain market share.

Nasdaq

vmt/clc

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