Stock market: Wall Street back in the red, scalded by continued inflation

(Photo: Getty Images)

MARKET OVERVIEW. The New York Stock Exchange fell again on Wednesday, disrupted by a US price indicator showing persistently very high inflation and opening the door to even more significant US monetary tightening.

Consult market news (again).

Stock market indices at close of trading

In Toronto, the S&P/TSX fell 52.81 points (-0.27%) to 19,837.25 points.

In New York, the S&P500 fell 65.87 points (-1.65%) to 3,935.18 points.

that Nasdaq fell 373.44 points (-3.18%) to 11,364.24 points.

that DOW fell 326.63 points (-1.02%) to 31,834.11 points.

that loons up $0.0015 (+0.1992%) to $0.7693.

that oil rose $5.42 (+5.43%) to $105.18.

gold rose $11.60 (+0.63%) to $1,852.60.

that Bitcoin fell from $2,057.88 (-6.59%) to $29,186.82.

the context

The entire session will have been dominated by the release of pre-Wall Street CPI CPI, which came in at 8.3% in April, up from 8.5% in March, but better than the 8.1% expected by economists .

In the first half of the day, indices rode a rollercoaster, marking the contrast of two visions of the indicator.

On the one hand, a positive read. Cornerstone Wealth’s Cliff Hodge concludes that “March will have been a peak” for inflation, which has begun “a slight deceleration”.

“Recession fears are overdone,” continued the analyst, for whom “consumers remain solid and continue to spend.”

The other part of the operators saw an alarming signal in this publication.

“Underlying inflation (excluding energy and food) is at its fastest pace since January,” said Allianz Investment Management’s Charlie Ripley, who says it makes the US Federal Reserve’s (Fed) job “more delicate”.

“This continued inflation will push the Fed to be more aggressive (rate hikes),” predicted FHN Financial’s Will Compernolle.

“It may even come to (Fed members) arguing for a 0.75 percentage point hike in June,” he said, a prospect dismissed last week by Fed Chair Jerome Powell.

“The longer inflation lasts, the longer you’re willing to bring it down,” commented Globalt’s Keith Buchanan. “That’s what’s causing this market reaction.”

Another example of a turbulent New York market, the bond market was rocked by violent moves throughout the session.

The US 10-year Treasury yield rose from 2.90% to 3.07% before relaxing almost back to where it started the day at 2.92%.

The Nasdaq, which has been regularly targeted for six months, has toasted again, weighed down by the specter of monetary tightening with unprecedented force in more than 40 years.

The tech heavyweights had one of their worst days of the year, Apple (AAPL) gives 5.18%, Microsoft (MSFT) 3.32%, Tesla (TSLA) 8.25% and Meta (FB) (formerly Facebook) 4.51%.

In a week, Tesla’s capitalization melted nearly 23%.

The Dow Jones managed to reverse its losses thanks to so-called defensive values, especially in the industrial sector, such as e.g caterpillar (CAT) (+1.09%), Chevron (CVX) (+1.48%), Merck (MRK) (+1.57%) or Dow (DOW) (+1.49%).

Elsewhere on the exchange, the cryptocurrency trading platform Coin Base (COIN) fell (-26.44% to $US53.72) after the release of below-expectations results on Tuesday after trade.

In line with the cryptocurrency, the group saw a decline in monthly user count and transaction volume starting in Q4.

The entire industry was caught up in the turbulence on the stock market Robinhood (HOOD) (-12.08%) to the indexed fund ProShares Bitcoin Strategy ETF (BITO) (-6.48%).

The first investment product of its kind, launched to fanfare last October, has since lost more than half of its value.

In addition, new economy financial companies such as the payment specialist Block (SQ) (ex-Square, -15.61%) or that of online credit payment Confirm (AFRM) (-19.57%) also suffered.

Electronic Art (EA) up sharply (-7.97% to $120.49), despite the announcement of the end of the historic partnership with Fifa for the game of the same name, as well as lower-than-expected quarterly results.

Leave a Comment