Stock market: Wall Street finishes ahead of the Fed in scattered order

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MARKET OVERVIEW. The New York Stock Exchange was disoriented on Tuesday, ending in disarray on the first day of a crucial meeting by the US Federal Reserve (Fed), which has promised brutal additional monetary tightening to tame inflation.

The Toronto Stock Exchange slipped further into correction territory on Tuesday as a growing number of observers expect the Federal Reserve to announce its biggest rate hike in nearly two months on Wednesday.

Consult market news (again).

Stock market indices at close of trading

In Toronto, the S&P/TSX ended up 194.05 points (-0.98%) at 19,548.51 points.

In New York, the S&P500 declined 14.15 points (-0.38%) to 3,735.48 points.

the Nasdaq rose by 19.12 points (+0.18%) to 10,828.35 points.

the DOW fell 151.91 points (-0.50%) to 30,364.83 points.

the loons closed at $0.0038 (-0.4847%) at $0.7718.

the oil fell $2.46 (-2.03%) to $118.47.

gold fell $21.90 (-1.20%) to $1,809.90.

the Bitcoin fell from $1,165.05 (-4.98%) to $22,235.55.

the context

“It looks like we’re going to raise interest rates by 75 basis points,” said Quincy Krosby, an analyst at LPL Financial, noting that markets were to blame for the possibility the day before, thanks to Wall Street Journal headlines They drive the stock down sharply.

“Since then, we haven’t seen any signs that the Fed wants to clarify this assumption of a stronger hike,” the analyst said.

“Indeed, if the Fed sticks with a half-percentage-point hike,” as investors had previously expected and as Fed Chair Jerome Powell cabled, “there is a risk for the market to be disappointed,” she noted.

It was the strength of US inflation (8.6% for the year and 1% for the month of May) released on Friday, along with a very depressed consumer confidence barometer, that turned the tide.

“Inflation has heightened expectations of an even more aggressive Fed, fueling fears of a recession,” concluded the analysts at Schwab.

The yield on 10-year US Treasuries, which moves counter to its price, rose to 3.47%, a new high since 2011.

The dollar rose again against the major currencies, hitting a more than 19-year high, buoyed by the prospect of a sharp rise in the cost of borrowing. And an expensive dollar is increasingly weighing on the profits of American companies.

The Fed’s Monetary Committee is due to announce its decision at 2:00 p.m. Wednesday, a decision that will be followed by a much-anticipated press conference by Jerome Powell.

“The big question now is how this monetary tightening will affect the economy. And how far will the market bottom out?” noted Quincy Krosby, while the S&P 500, the most representative index of the American market, has fallen into the “bear market” zone or bear market since Monday, equivalent to a loss of more than 20 % since its last peak.

While the Fed can affect demand by raising the cost of money, it has no control over supply, which is currently being hit by supply chain constraints.

“We are particularly disappointed to see that China risks continuing restrictions in Shanghai,” which will further affect the production and supply of products, the specialist from LPL Financial stressed.

Of the eleven S&P sectors, only energy (+0.07%) and information technology (+0.62%) managed to stay afloat. Utilities (-2.58%), consumer (-1.29%) and real estate (-1.06%) stocks led the decline.

The titles of the software company are on the rating Oracle (ORCL) Soared 10.41% to $70.72 after a better-than-expected quarterly result.

The cryptocurrency platform Coin base (COIN)That fell more than 11% on Monday amid the virtual currency crisis trimmed its closing losses to -0.83% when it announced on Tuesday it would cut 18% of its workforce.

oil exploration company Continental Resources (CLR), based in Oklahoma, rose 15%. Shale gas magnate Harold Hamm, already a majority shareholder, has made an offer for the company’s remaining capital for $4.3 billion, which is valued at more than $25 billion.

The express carrier FedEx (FDX) Soared 14.41% to $229.95 after announcing a sharp increase in its dividend.

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