Wall Street: first post-Trump halt
In late morning trading, the Dow Jones fell back 0.4% to 44,100.9 points, but managed to preserve the 44,000-point threshold. The S&P 500, down 0.2%, fell back below the 6,000-point mark to 5,987.9 points.
The Nasdaq Composite lost 0.4% to 19,269.4 points.
Until Tuesday, all three indices had set a series of closing records, with investor optimism fueled mainly by Donald Trump's promise of tax cuts.
But this climate of euphoria - also fuelled by the strength of the US economy - has resulted in a rapid rise in bond yields, which is now providing investors with a good excuse to take profits.
On the Treasuries market, the yield on 10-year US Treasuries has rallied by more than four basis points back above 4.39%.
These tensions reflect concerns that the Federal Reserve may be forced to ease monetary policy less quickly than expected.
Given the optimism surrounding the economy, the estimated probability of a Fed rate cut of 25 basis points on December 18 has thus fallen back to around 65%, according to CME's FedWatch, compared with around 88% a month ago.
Beyond these elements, investors are also feverishly anticipating tomorrow's release of the latest US consumer price figures, even though these should confirm inflation's return to the Fed's 2% target.
The impact of rising yields is not penalizing the technology sector, despite its sensitivity to changes in interest rates, which even posted the day's biggest sector gain (+0.4%) after its recent underperformance.
With bond yields on the rise, the dollar continues to gain ground against the euro, with the single currency now flirting with the 1.0600 level.
The dollar's good form, on the other hand, is causing the ounce of gold to fall back towards $2,600, while Bitcoin continues its advance beyond $86,786 after peaking at $89,891.7 during the day.
Copyright (c) 2024 CercleFinance.com. All rights reserved.
Go to the original article.
Contact us to request a correction