The New York Stock Exchange, anxious about inflation and the monetary reaction on the eve of a hearing by the Fed boss in the Senate, limited its losses on Monday thanks to a strong return from the Nasdaq shortly before the close.
According to final results, the Dow Jones index finally dropped only 0.45% to 36,068.87 points, after slipping nearly 2%.
The Nasdaq, which plunged nearly 3% in session, finished narrowly in positive territory at 14,942.83 points (+ 0.05%).
The S&P 500 lost 0.14% to 4,670.29 points.
US stocks broadly concluded lower on Monday “as investors grapple with rising bond yields, persistent inflation and the prospect of faster-than-expected monetary policy tightening,” Wells analysts said. Fargo.
Last week, all three indices had already suffered a weekly loss (of 4.5% for the Nasdaq) as bond yields climbed in the wake of signals given by the Fed that it was going to be tougher on inflation. .
The markets are now anticipating a hike in key rates as early as March and up to three more in 2022, not to mention the reduction in the balance sheet of the Central Bank, which by reinvesting less in bonds carries out another round of monetary tightening.
As Jerome Powell appears before the Senate Banking Committee on Tuesday for his confirmation process for a second term at the head of the Fed, “the markets are worried on the eve of his hearing,” explained Gregori Volokhine, portfolio manager for Meeschaert Financial Services.
“All the senators are going to urge him to say that he will fight strongly against inflation. It worries the market a little to have a Powell even more + hawk + than a week ago,” he added. .
Bond yields climbed in session to 1.80%, a two-year high, before settling to 1.76% which allowed stocks to regain some of the lost ground.
Bond rates have tightened in recent weeks with fears related to the economic impact of the Omicron variant and the more combative attitude towards inflation from the (Fed, which is preparing to raise rates in the spring.
So investors will be watching the US price index (CPI) which will be published on Wednesday for December when a new monthly increase of 0.4% is expected.
For Joe Manimbo, specialist in the foreign exchange market for Western Union, inflation over one year could be displayed at 7% against 6.8% in November.
Faced with these expectations, the dollar has regained strength against the euro (+ 0.33% to 1.1323 around 8:00 p.m. GMT) and the main currencies (+ 0.26% for the dollar index).
Also a victim of the drying up of the taste for risk, bitcoin remained in difficulty: it reached 40,539 dollars on Saturday, a low since September, and traded on Monday for 41,333 dollars (-2.32% compared to Sunday).
This week is also marked by the first quarterly results, especially for banks on Friday.
Jamie Dimon, CEO of JPMorgan, was optimistic about US growth this year, which could “be the best in decades,” he told CNBC.
According to him, the American consumer is in good financial shape but the stock market could have a tumultuous year with rising rates.
Yoga and sportswear maker Lululemon lost 1.91% to $ 348.83 after reporting that its fourth quarter would not be as good as expected due to the Omicron variant which led to “cutting back on hours of work. opening “of stores, CEO Calvin MdDonald said in a statement.
Other retailers were in the dark, from Nike (-4.16%) to the discount chain Costco (-3.24%). The Peloton smart apartment bikes were down 3.40% to $ 34.37.
Featured in the world of video games, the Zynga share, icon of mobile games, soared 40.67% to 8.44 dollars, after the announcement of its buyout for 12.7 billion dollars by the American video game group Take-Two Interactive.
This editor, which is behind the huge Grand Theft Auto franchise, however, shed 13.13% to 142.99 dollars.
Zynga has gained fame through mobile games like FarmVille but has declined in popularity in recent years. In 2021, Zynga’s stock dropped 54% on the stock market.
Highly volatile stock at video game store chain GameStop fell 6.73% to $ 131.15 after soaring on Friday with the announcement of partnerships in digital assets.