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MARKET OVERVIEW. Paradoxically, the New York Stock Exchange celebrated the interest rate hike of half a percentage point announced by the American Federal Reserve (Fed) on Wednesday with a significantly higher ending, as this rules out a stronger tightening for the time being.
Consult market news (again).
Stock market indices at close of trading
In Toronto, the S&P/TSX rose by 279.67 points (+1.34%) to 21,184.95 points.
In New York, the S&P500 collected 124.69 points (+2.99%) at 4,300.17 points.
that Nasdaq increased by 401.10 points (+3.19%) to 12,964.86 points.
that DOW gained 932.27 points (+2.81%) to 34,061.06 points.
that loons up $0.0060 (+0.773.3%) to $0.7851.
that oil rose $5.59 (+5.46%) to $108.00.
gold returned $13.80 (+0.74%) to $1,884.40.
that Bitcoin rose $2,191.34 (+5.82%) to $39,839.64.
“It’s a party on Wall Street, bond yields are falling. In the end, the Fed wasn’t that hawkish,” commented Western Union’s Joe Manimbo.
“It’s reflected in the fact that the Fed is ruling out a 0.75 percentage point hike in the future,” the analyst noted.
Despite endorsing a market-expected 50 basis point hike in key interest rates – a first in more than twenty years – the Monetary Affairs Committee (FOMC) appears more cautious on the possibility of a deeper 75 basis point tightening. what investors feared.
A 0.75 percentage point rate hike “is not firmly under consideration,” Fed Chair Jerome Powell said at a news conference after announcing the committee’s decision.
Overnight rates are therefore set at levels between 0.75% and 1%, but further increases in the region of 0.50% “are on the table for the next two sessions” in June and July, Jerome Powell said.
“That begs the question for September, we need to see the data when inflation slows down,” the Western Union analyst suggested.
The Fed’s balance sheet will also shrink by $47.5 billion a month starting June 1 and by $90 billion after three months, another way to raise borrowing costs to dampen demand and inflation .
Bond yields fell sharply, with 2-year notes falling to 2.63% from 2.78% the previous day. The 10-year Treasury bill yield fell to 2.92% from 3% earlier in the session.
The 11 S&P sectors closed high in the green starting with Energy (+4.11%) while crude oil prices rose more than 5%, followed by Communication Services (+3.68%) and Information Technology (+3.51%) ).
The platform for renting accommodation Airbnb (ABNB) saw the stock soar 7.71% to $156.18. It raised its sales forecast for the second quarter and was able to significantly reduce its loss in the first quarter.
Starbucks (SBUX) rose 9.83% to $81.64. The American coffee giant managed to offset a sharp slowdown in its operations in China in the first quarter with a boost in the United States, where it plans to ramp up the development of “drive-in” outlets where customers are served in their vehicle.
The title of the manufacturer of the Covid vaccine, Modern (MRNA), up 5.81% to $155.05. The lab announced better-than-expected quarterly earnings on sales of $5.93 billion for its anti-Covid vaccine, its only product.
About (VIA), the chauffeur-driven rental company and food delivery specialist, fell 4.65% to $28.10 despite a doubling in first-quarter revenue, helped by a price hike. Uber continues to lose, but expects further growth in the second quarter.
The title was also propelled by his rival’s fall in action Lyft (LYFT) which fell 29.91% to $21.56. The group posted a larger-than-expected loss in Q1 and said it needed to invest more to increase its driver fleet.