Wall Street up sharply ahead of the Fed

(New York) The New York Stock Exchange rebounded sharply at the opening on Wednesday pending the outcome of the monetary meeting of the American Central Bank (Fed).

Posted at 9:44 a.m.
Updated at 10:40 a.m.

As of 10 a.m., the Dow Jones climbed 1.20%, the NASDAQ jumped 2.37% and the S&P 500 advanced 1.67%.

After another roller coaster session, the Dow Jones index ended Tuesday down 0.19% to 34,297.73 points. The NASDAQ had concluded a loss of 2.28% to 13,539.29 points and the S&P 500 down 1.22% to 4356.45 points.

“Federal Reserve policymakers are set to signal plans for their first rate hike since 2018 as they seek to contain the highest inflation in nearly 40 years,” explained Art Hogan of National Securities. .

The Central Bank’s Monetary Committee issues a statement at 2 p.m., which will be followed thirty minutes later by a press conference by Fed Chairman Jerome Powell.

The markets have been nervous since the start of the year, and particularly over the past two weeks, fearing that the Fed will be stricter than expected in its monetary tightening. Geopolitical tensions over Ukraine also weighed on investors’ mood.

The broader S&P 500 index, representative of the American market, has lost 8.6% since the beginning of the month and its last record. The NASDAQ fell 13.5%.

But for Art Hogan, “there is a good chance that the anticipation of rate hikes will end up being worse than the hikes themselves”.

“The market should welcome a relatively aggressive Fed and that is already priced in. We should come to an end to this decline and volatility,” added Peter Cardillo of Spartan Capital.

The NASDAQ was reassured by the good results of Microsoft (+5.30% to 303.43 dollars).

The computer giant, which represents the second largest market capitalization in the world, announced on Tuesday evening that it had made 51.7 billion dollars in turnover and released 18.8 billion in net profit, results above analysts’ forecasts for this second quarter of its staggered fiscal year.

The big names in tech were firmly back in positive territory like Apple (+1.85%), Amazon (+2.10%), or Alphabet (Google, +1.77%).

Microprocessor maker Texas Instrument was sought after (+3.45%) after raising its sales forecast for the current quarter.

The titles of the other computer giants, which had suffered in recent sessions, also started to rise again, such as Micron Technology (+3.17%) or the graphics card specialist Nvidia (+2.70%).

The aircraft manufacturer Boeing dropped 1.81% to 200.38 dollars.

The aircraft manufacturer had to pass large charges ($ 3.8 billion) in its accounts in the fourth quarter due to the suspension of deliveries of its long-haul 787 Dreamliner, plagued by production problems.

The action of the group of hygiene products Kimberly-Clark fell 5% (132.63 dollars), penalized by mixed results and disappointing forecasts, in a context of high inflation and supply difficulties.

The group, which notably markets Kleenex tissues, Cottonelle toilet paper and Huggies diapers, recorded a net profit between October and December of 357 million dollars, 34% less than in 2020 due to the increase the price of polymer-based materials and paper pulp as well as higher distribution and energy costs.

Bond yields on 10-year Treasury bills edged up to 1.78% from 1.76%.

The VIX, the fear index that reflects volatility, lost ground to 29.50 points, a level that remained high, however.

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