Wall Street ends down, calmed by the rise in bond rates – 05/23/2024 at 10:47 p.m.

Wall Street ends down, calmed by the rise in bond rates – 05/23/2024 at 10:47 p.m.
Wall Street ends down, calmed by the rise in bond rates – 05/23/2024 at 10:47 p.m.

The floor of the New York Stock Exchange (AFP / ANGELA WEISS)

The New York Stock Exchange ended lower on Thursday, performing an about-face in the middle of the session after the publication of indicators marking a rebound in American economic activity, which caused bond rates to rise.

The Dow Jones lost 1.53%, the Nasdaq index lost 0.39% and the broader S&P 500 index lost 0.74%.

Wall Street had started the day well, well disposed by the meteoric results of the semiconductor giant Nvidia (+9.32%), the day before after the stock market.

The Santa Clara (California) group confirmed to investors that the fever for so-called generative artificial intelligence (AI), a major consumer of its chips, was intact.

Nvidia does not see it weakening and has communicated forecasts well above analysts’ projections.

“It’s simply remarkable, but it was not enough” to keep New York in the green, noted Steve Sosnick of Interactive Brokers, “because the PMI indices took over.”

The composite index (all sectors combined), established by S&P Global to measure economic activity in the United States, reached its highest level in 25 months in May.

If the services sector has sparked, the manufacturing industry has also seen a rise in power.

“These numbers told a story that the market did not want to hear, that of a strong economy, likely to lead to price increases,” explained Steve Sosnick.

This picture of the American economy supports the hypothesis of a continuation of an aggressive monetary policy, thereby postponing rate cuts.

“The bond market reacted first, followed by stocks,” recalled Steve Sosnick. “It’s a day that calls attention, because I don’t think anyone expected a clear drop after Nvidia’s results.”

The yield on 10-year US government bonds approached 4.50%, before returning to 4.47%, compared to 4.42% the day before at closing.

For Steve Sosnick, the drop in the Dow Jones is more representative of the market as a whole, because the Nasdaq only owes its losses to Nvidia, which masked the trend.

Apple (-2.11%), Amazon (-1.14%) and Alphabet (-1.65%) ended up clearly in the red, as did Microsoft, which seemed impervious to all the vicissitudes of the market for several years. days.

The securities of the 30 member companies of the Dow Jones ended down, with a special mention to Boeing (-7.55%).

The manufacturer’s action skidded in reaction to statements by the group’s financial director Brian West, according to which Boeing no longer plans to generate cash in its 2024 financial year.

Entangled in a series of difficulties, including a flight incident on January 5, the group has erased around a third of its market capitalization since the start of the year.

Elsewhere on the stock market, concert organizer Live Nation plunged (-7.81%) after the US Department of Justice summoned it to federal court for anti-competitive practices. The Biden government has said it wants to cause a split between Live Nation and its ticketing subsidiary Ticketmaster.

the Ralph Lauren ready-to-wear group (+3.27%) benefited from better-than-expected quarterly results despite forecasts considered disappointing.

Another player in the clothing sector, VF Corporation, took a hit (-3.22%). The holding company particularly suffered from the fall in sales of Vans shoes (-26%), attributed to an inventory adjustment at wholesalers.

The DuPont conglomerate performed well (+0.48%) after the announcement of its upcoming split into three separate entities, all listed on the stock exchange. This is a new restructuring for the group which has changed shape several times over the last ten years.




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