(CercleFinance.com) – The New York Stock Exchange moved without a clear trend on Thursday, while Treasury yields rose on the back of monetary policy tightening by major central banks.
By late morning, the Dow Jones was down 0.2% at 33,877.7 points, while the Nasdaq Composite was up 0.2% at 13,524.2 points.
The consolidation phase in the US stock market since last Friday continues, with investors worried that the major central banks will continue to raise interest rates.
After the not-so-welcoming remarks yesterday by Jerome Powell, the head of the Fed, fears of a re-acceleration of monetary policy tightening were fueled this Thursday by the Bank of England, which warned that it could still raise its key interest rates in the face of persistent inflation.
Earlier, it was the Swiss National Bank (SNB) that had continued to tighten monetary policy by raising its key interest rate by 25 basis points to 1.75%.
The concerted tightening of monetary policy by the central banks led to an increase in bond yields. The yield on 10-year US Treasuries gained six basis points to 3.78%.
At the sector level, the S&P non-essential consumption index posted the day’s strongest gain (+1.2%), followed by technology’s gain of 0.6%.
On the other side of the spectrum, the values of energy (-1.3%), industry (-0.6%) and raw materials (-0.7%) weigh particularly heavily on the trend.
Tighter credit conditions typically portend weaker GDP growth and higher default rates, warranting caution towards more cyclical sectors.
The index measuring the volatility of the S&P 500, called the ‘fear index’, rose slightly but remained around 13.5 points, the lowest level since January 2020.
On the value side, FedEx rose 3.3% after the release of its quarterly results, notably marked by an improvement in its cost structure.
Amazon rose 3.8% following positive comments from BofA analysts, who called the stock their “preferred stock” in the e-commerce sector.
Tesla continues to fall (-0.1%) in the wake of a downgrade from Morgan Stanley, mainly due to valuation issues following the strong performance recorded by the stock since the start of the year.
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