The New York Stock Exchange ended higher on Wednesday, reversing the trend after an initially negative response to a mixed inflation indicator, thanks mainly to bargain hunting.
The Dow Jones gained 0.31%, the Nasdaq 2.17% and the broader S&P 500 index gained 1.07%.
However, the New York market got off on the wrong foot, kept away by a mixed inflation report.
It showed that consumer prices rose only 2.5% year-on-year in August in the United States, according to the CPI index, less than the 2.6% expected by economists and below from 2.9% in July.
But the release also pointed to an acceleration in the core index, excluding food and energy, to 0.3% over one month compared to an expected 0.2%, largely due to housing and transport costs.
“This data is encouraging overall, but calls for caution regarding the price path,” replied José Torres, an analyst at Interactive Brokers, in a note.
For Lydia Boussour, EY analyst, “the August CPI confirmed the thesis of a quarter-point rate cut (…) rather than a half-point” by the American central bank (Fed) at the end of its next meeting, on the September 17 and 18.
Operators now give the hypothesis of a half-point planing strike a probability of only 15%, compared to 60% on Friday.
The bond market recorded this rebalancing and the yield on 2-year US government bonds rose to 3.64% compared to 3.60% the previous day at close.
“There was an overreaction to the CPI,” which passed “after reflection,” said Art Hogan, an analyst at B. Riley Wealth Management.
As such, the market “came to a halt after a series of sell-offs, particularly in semiconductors,” he continued.
The champion of chips dedicated to artificial intelligence (AI) Nvidia went up 8.15%, followed by its rivals AMD (+4.91%) and Broadcom (+6.79%).
Also benefiting from cheap purchases were Starbucks (+5.21%), food delivery platform DoorDash (+3.35%) and sports equipment manufacturer Lululemon Athletica (+3.24%).
Arthur Hogan in Wednesday’s exchanges did not see much impact from Tuesday night’s presidential campaign debate, when Democratic candidate Kamala Harris, by all accounts, got the better of Republican rival Donald Trump.
The only notable exception, investors attacked the action of the former president’s media group, Trump Media and Technology Group (TMTG), which fell 10.47%.
The stock is at its lowest level since TMTG joined a listed vehicle on March 26. From its peak that day, it has fallen nearly 80%.
Elsewhere on the stock market, the English football club Manchester United, listed in New York, was penalized (-4.57%) for a new annual loss, quadrupling compared to the previous year.
This is the fifth consecutive financial year in deficit for the Mancunian club, who nevertheless recorded the highest turnover.
The video game store chain GameStop (-11.98%) fell after announcing a sharp decline in its turnover and a large new share issue.
Bank of America (-0.71%) suffered from a new sale of a block of securities by Berkshire Hathaway, Warren Buffett’s holding company, a major shareholder of the property.
But several rival banks, which were hit on Tuesday, were supported by bargain hunting, notably JPMorgan Chase (+0.81%) and Goldman Sachs (+0.86%).
2024-09-11 22:27:26
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