Stock market: Wall Street plummets after Fed President’s strong speech

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MARKET OVERVIEW. The New York Stock Exchange slipped resolutely into the red on Friday after firm statements from the Governor of the US Federal Reserve (Fed) who was determined to continue the fight against inflation at the risk of slowing down the economy.

For its part, the Toronto Stock Exchange followed the same trend, shedding more than 200 points, with the technology sector down more than 4%.

Consult market news (again).

Stock market indices at noon

In Toronto, the S&P/TSX recorded a decrease of 221.74 points (-1.10%) to 19,950.60 points.

In New York, the S&P500 recorded a decrease of 83.33 points (-1.98%) to 4,115.79 points.

the Nasdaq fell 319.20 points (-2.53%) to 12,320.07 points.

the DOW fell 566.20 points (-1.70%) to 32,725.58 points.

the loons fell $0.0048 (-0.6151%) to $0.7689.

the oil fell $0.51 (-0.55%) to $92.01.

L’gold fell $22.80 (-1.29%) to $1,748.60.

the Bitcoin fell $745.90 (-3.46%) to $20,812.45.

the context

Jerome Powell has reiterated his determination to continue the tightening cycle to contain price rises, to the point of pursuing monetary policy that is “sufficiently restrictive to bring inflation down to 2%”, i.e. that will voluntarily economy is slowing down.

The return to price stability “will take time” and lead to “a long period of weaker growth” and “a slowdown in the labor market”, the central banker hammered out at the Jackson Hole (Wyoming) symposium.

“He was unequivocal,” responded LPL Financial’s Quincy Krosby, “although he was criticized after the last Fed meeting (in July) for being ambiguous, which caused confusion in the markets,” some investors believed that the Federal Reserve is about to be relaxed.

While prior to the speech, Fed officials gave the Fed a half-point and 0.75 percentage point chance of raising interest rates at the next meeting in late September, the cursor has clearly tilted to the second option after Jerome Powell’s speech.

For Advisor Alliance’s Chris Zaccarelli, the Fed chairman said “nothing new” and was content to “restate what he’s been saying for several months.”

In the bond market, the 2-year US Treasury yield, which reflects monetary policy developments more closely than 10-year rates, hit a 15-year high of almost 3.45% as indices fell sharply. June.

This heightened expectation of further rate hikes penalized the technology sector, which depends on credit conditions to fund its growth. alphabet (GOOG, -4.21%), Amazon (AMZN, -2.75%) and Meta (META, -2.95%) lived the sequence poorly.

After a fairly sharp drop before the Fed President’s intervention, the US dollar recovered against the euro, back within a tad of parity, the threshold above which it had returned.

According to the PCE index released on Friday, Jerome Powell’s authoritative message eclipsed the string of strong US indicators that initially carried the market, notably the slight month-on-month decline in US prices in July.

The 1-year inflation rate fell to 6.3% from 6.8% in June.

Another encouraging number, the consumer confidence index, compiled by the University of Michigan, rose sharply in July, well above expectations. In addition, consumers have revised downwards their inflation forecasts for the one- and five-year horizon.

is popular electronics arts gained ground (EA, +5.78% to $134.39), driven by information from Swedish media GLHF Amazon would be about to make an offer to buy the video game publisher.

The ready-to-wear brand gap was penalized (GPS, -1.80 to $9.83) after declining sales, a loss in the second quarter (closed in late July) and the group’s decision to withdraw full-year guidance due to excessive uncertainty.

Visé, like his German partner BioNTech (BNTX), through a lawsuit brought by the biotech modern (MRNA, -2.06%) due to patent infringement, Pfizer (PFE) is down 1.15% at $47.35. The case concerns patents related to the so-called messenger RNA technology, which enabled the accelerated development of the first vaccines against Covid-19.

The computer manufacturer Dell technology suffered (-10.15% to $43.04) after announcing below-expected quarterly sales, along with cautious H2 comments and a slowdown in demand.

The online installment payment specialist Confirm slipped (AFRM, -20.40% to $24.86) on the day after the release of a bigger-than-expected loss and forecasts that were deemed disappointing for the current fiscal year.

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