by Stephen Culp
NEW YORK (Reuters) – The New York Stock Exchange ended sharply lower on Thursday, as investors’ appetite was weighed down by fears that the Federal Reserve (Fed) would maintain high interest rates for longer than initially anticipated. , as the American central bank suggested on Wednesday after its meeting.
The Dow Jones index fell 1.08%, or 370.46 points, to 34,070.42 points.
The broader S&P-500 lost 72.20 points, or 1.64%, to 4,330 points.
The Nasdaq Composite fell 245.14 points (1.82%) to 13,223.99 points.
The main Wall Street indices ended in sharp decline, while bond yields stood at a ten-year high, the day after the end of the Fed’s monetary policy meeting at the end of which its president, Jerome Powell warned that there was still a way to go to bring inflation back towards the 2% target.
Particularly sensitive to interest rates, high-growth stocks like Amazon, Nvidia and Apple finished in the red, weighing on the S&P-500 and the Nasdaq which fell to their lowest levels since June.
Although it, as expected, maintained interest rates at their current levels on Wednesday, the Federal Reserve revised its economic forecasts and indicated that rates would remain high over the next year, dashing hopes of a more economic turnaround. accommodating in its policy before 2025.
“With interest rates higher for longer, there are more pressures on the system and on the economy,” said Thomas Martin, portfolio manager at GLOBALT in Atlanta.
“It might make people say that the latency of high rates — which we’re just starting to experience — could really hurt,” he said.
Citing the rates, but also the strike of the main union of American auto workers, a possible partial closure of the American federal administrations next month, or the rise in bond yields and oil prices, he estimated that the prospect of a soft landing the economy was weakening.
According to data released today, weekly jobless claims in the United States fell to an eight-month low, reinforcing the Fed’s view that the labor market remains very tight and the economy is resilient enough to withstand high interest rates over time.
Maintaining high rates over time has become the norm for the central banks of major global economies in their fight against galloping inflation. “All have been conservative,” underlined Thomas Martin, while the Bank of England announced during the day a pause in its cycle of rate increases but warned that the recent drop in inflation in the country was not acquired.
All major sectors of the S&P-500 fell by almost 1% or more, with real estate experiencing its biggest one-day fall since last March.
On the value side, among the movements to note, the 2.7% decline in Broadcom after information according to which the managers of Google, owned by Alphabet, plan to stop sourcing from the semiconductor manufacturer for chips in 2027. linked to artificial intelligence (AI).
FedEx jumped 4.5% after reporting fiscal first-quarter adjusted profit that beat expectations.
Fox Corp and News Corp rose in the wake of Rupert Murdoch’s announcement that he would hand over the chairmanship of the groups.
( Jean Terzian)
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