NEW YORK (dpa-AFX) – The US stock exchanges reacted negatively to the interest rate hike by the US Federal Reserve on Wednesday. While the leading index Dow Jones Industrial slipped into the red at times and recently claimed a gain of 0.13 percent to 33,589.20 points, the market-wide S&P 500 still rose by 0.48 percent to 4282.85 points. The technology-heavy selection index Nasdaq 100 contained its increase to 1.09 percent at 13,604.84 points.
As expected, the monetary watchdogs raised the key interest rate by 0.25 percentage points to a range of 0.25 to 0.50 percent in view of the high inflation. By the end of the year, however, the Fed expects the key interest rate to rise to 1.9 percent, according to its new forecasts. This is in line with market expectations. In December, the central bankers themselves had indicated only three interest rate hikes this year of 0.25 points each. The Fed balance sheet, which has been swollen as a result of the Corona emergency programs, is also to be reduced, which would deprive the financial market of liquidity.
Before the interest rate decision, signs of easing in the Ukraine conflict had created a good mood. The negotiations between Kyiv and Moscow about an end to the war are becoming more concrete. Documents are being prepared for possible direct talks between President Volodymyr Zelensky and Russian President Vladimir Putin, said Ukrainian Presidential Advisor Mykhailo Podoliak, according to an interview with US broadcaster PBS.
According to the Financial Times newspaper, both sides are working on a 15-point plan. First and foremost are the neutrality and demilitarization of Ukraine demanded by Russia and the withdrawal of Russian troops demanded by Kyiv. Territorial issues should therefore only be discussed later. Ukraine’s presidential adviser Podoliak confirmed the existence of a draft agreement with Russia, but dampened expectations. The 15-point plan only reflects the Russian demands, “no more,” Podoljak wrote on Telegram. The Ukrainian side has its own position.
The prospect of an easing in the Ukraine conflict kept technology stocks in particular on their recovery course. In the Dow, Apple rose by around 0.8 percent. After the production stop due to the corona lockdown in Shenzhen, southern China, Apple partner Foxconn partially resumed operations in the iPhone production facility in the metropolis. Sector-defining chip titles were also among the big winners. On the Nasdaq, Micron’s stock was up almost 7 percent, and Nvidia was up around 3.8 percent.
Shares in Chinese technology companies listed on the Nasdaq were in even greater demand: shares in the e-commerce platform Pinduoduo, the Internet company JD.com and the search engine operator Baidu rose by 31 to 53 percent. At Amazon’s competitor Alibaba, the shareholders were happy about a jump in price of more than 30 percent. Sector stocks from China had previously rallied strongly in the Far East after the state news agency Xinhua reported that the government had an interest in stabilizing the stock markets – and in keeping Chinese stocks listed on stock exchanges outside the country. Concerns about being excluded from the US market had weighed heavily on values in recent weeks.
Starbucks shares are up nearly 4.5 percent after US bank JPMorgan upgraded them to an overweight recommendation. In addition, the focus was on the change of boss at the world’s largest café chain. Kevin Johnson is stepping down as CEO and his predecessor Howard Schultz is temporarily returning.
The fact that the top Spanish soccer club FC Barcelona will be working with Spotify as the main sponsor from the summer has given the shares of the music streaming market leader a price increase of 5.3 percent.
In contrast, the titles of the armaments and technology group Lockheed Martin fell by almost six and a half percent. The Bloomberg news agency had reported, citing insiders, that the US Department of Defense is planning around a third fewer new F-35 stealth jets for the next budget than previously planned. Only recently it became known that the German government wants to buy up to 35 machines of the type as successors to the Tornados introduced more than 40 years ago.
At security software specialist Nortonlifelock, the announced $8.6 billion takeover bid for British competitor Avast caused the share price to fall by almost 15 percent. Its shares were also under pressure in London, as the responsible British authority expressed concerns about the transaction and wants to examine it more closely./gl/jha/
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