The New York Stock Exchange ended lower on Wednesday on concerns about the intentions of the U.S. central bank (Federal Reserve), which confirmed it was considering faster rate hikes to fight inflation.
The Dow was down 0.42% at 34,496.51, according to final results at the close. The Nasdaq fell 2.22%, falling below 14,000 points to 13,888.82. The S&P 500 fell 0.97% to 4,481.15.
Investors focused on the release of minutes from the Fed’s last meeting (the “Minutes”) throughout the trading day for fresh signs of the magnitude and pace of future rate hikes. Bank balance sheet.
The Nasdaq fell nearly 3% in the session, before recouping some of its losses before the close.
Fed members indicated in these “minutes” that they supported more significant monetary tightening.
“Many participants pointed out that one or more rate hikes of 50 basis points (half percentage point, editor’s note) at future meetings (…) may be appropriate, especially if inflationary pressures remain high or intensifying .», whether indicated in this report.
The Fed began raising overnight rates in mid-March for the first time since 2018, but opted for a more modest hike of just 25 percentage points.
On top of that, the central bank now appears determined to more quickly unwind the billions of dollars in assets it bought to support the economy during the health crisis.
“The Fed has revealed that it plans to shrink its balance sheet by nearly $100 billion a month, which is twice the pace of shrinking its balance sheet between 2017 and 2019,” commented Capital Economics’ Paul Ashworth.
For Sam Stovall, chief strategist at CFRA, “the approach is no stricter than expected”.
The Nasdaq, which was down nearly 3 percent, pared some of its losses before the close, while the Dow recovered slightly.
But Schaeffer analyst Patrick Martin said the VIX, known as a “fear gauge” because it reflects volatility, resumed its uptrend, recording its “biggest one-day gain since Feb. 10.” “.
In this case, bond yields rise. The yield on the 10-year Treasury note rose to 2.62% from 2.54% the previous day, the highest level since March 2019, well before the Covid-19 pandemic.
The benchmark 30-year mortgage rate in the U.S. market also crossed the 5 percent threshold on Wednesday for the first time in more than a decade, with mortgage applications falling for a fourth straight week. According to the Mortgage Bankers Association. .
The development of the war in Ukraine also remained in focus for investors as the United States announced a new round of “devastating” sanctions against Russia, targeting big banks and the children of Vladimir Putin.
Listed low-cost carrier Spirit fell 2.41 percent to $26.27 after rising more than 20 percent in the previous day, which was overtaken by JetBlue after it was first acquired by Frontier.
JetBlue, which is backing $3.6 billion on Spirit, tops Frontier’s title, down 8.72 percent. Frontier shares plunged 10.99 percent to $10.61.
Twitter fell some ballast (-0.43% to $50.76) and was celebrated on Wall Street in recent days when Tesla boss Elon Musk announced he had taken a large stake in the network company, making him its largest shareholder.
So-called growth tech stocks, such as Apple (-1.85%), Amazon (-3.23%), Tesla (-4.17%) or Meta (Facebook -3.68%), are very sensitive to rising interest rates.
More from semiconductor makers like Nvidia (-5.88% to $244.07) or AMD (-2.95%).
Six of the 11 S&P 500 sectors closed in the red, led by consumer goods (-2.63%) and information technology (-2.55%), followed by banks (-0.66%).