(New York) The New York Stock Exchange closed sharply lower on Thursday, weighed by the European Central Bank’s monetary tightening decisions, but also by fear of Friday’s announcement that US inflation will continue into May.
Updated yesterday at 5:21 PM.
The Dow, which recorded its worst session since mid-May, closed down 1.94% at 32,272.79 points. The tech-heavy Nasdaq was down 2.75% to 11,754.23 points and the S&P 500 by 2.38% to 4,017.82 points, according to provisional results at the close.
10-year Treasury yields, which move inversely to their price, remained narrow, above 3.04%.
“Primarily, we are seeing an introduction to inflation data for Friday which is really making the market nervous,” said Peter Cardillo of Spartan Capital Securities.
Analysts expect the US CPI to continue rising last month by 0.7% (after +0.3% in March) and 8.3% over twelve months.
“This report could have implications for the US Federal Reserve’s decision next week,” Wells Fargo analysts also expressed concern as the Fed holds its monetary meeting next Tuesday and Wednesday and is expected to raise key interest rates by another 50 basis points, in line with market expectations. .
Another nervous factor comes from the European Central Bank (ECB), which plans to raise interest rates by a quarter point in July, halt its asset purchases and possibly raise another 50 basis points in September.
In addition, the ECB’s new economic forecasts show that inflation will rise to 6.8% this year while Eurozone GDP is likely to grow only 2.8% in 2022, a stagflation-like curve profile.
“In short, the market is focused on central banks’ fight against inflation,” concluded analyst Spartan Capital. Schwab experts echoed their concerns: “The continued rise in prices and the decision by central banks around the world to tighten monetary policy is fueling fears of recession.”
Wall Street indices, which had started a bit in the red, faltered gradually during the session before accelerating their decline at the close, and these movements were amplified by lower trading volume.
All S&P sectors fell in the red, from telecom services (-2.75%) to consumer products (-1.50%) to real estate (-2.29%) and banking (-2.61%).
In the stock market, big names in technology, or so-called surge-sensitive growth stocks, fell sharply like Apple (-3.60%), Amazon (-4.15%) or Netflix (-4, 96%).
Microprocessor manufacturers, which saw a session spike the day before, largely lost ground like AMD (-3%) or Nvidia (-3.22%).
The Target supermarket chain, which this week sounded the alarm on consumer demand, slid further (-1.37%) despite announcing an increase in dividend.
Five below, the discount chain, also lost 1.37% after a sharp decline in its full-year sales and earnings expectations.
The address of Novavax Laboratories, whose US health authorities at the beginning of the week recommended a green light for a vaccine against the Corona virus, melted 17.22% to $41.48. And the Health Food and Drug Authority said, Thursday, that the decision was postponed to examine changes in the manufacturing process.
Tesla fell 0.89% late in the session to $719.12, after rising nearly 4% on the day.
Skillsoft, a company that provides digital training, collapsed 19.24% as its quarterly sales slump disappointed Wall Street.
#Wall #Street #closes #sharply