by Chuck Mikolajczak
NEW YORK (Reuters) – The New York Stock Exchange ended mixed on Tuesday, with only the Nasdaq finishing slightly in the green, alongside a modest rise in bond yields ahead of inflation data this week, while Investors were wondering about the timing and extent of the shift in monetary policy from the Federal Reserve (Fed) this year.
The Dow Jones index fell 0.42%, or 157.85 points, to 37,525.16 points.
The broader S&P-500 lost 7.04 points, or 0.15%, to 4,756.50 points.
The Nasdaq Composite advanced 13.94 points (0.09%) to 14,857.71 points.
While it had gained momentum since last month, the hypothesis that the Fed will cut rates by 25 basis points in March is no longer as favored by traders. According to FedWatch, this scenario is anticipated at 63.8%, compared to 79% a week earlier.
In this context, the yield on US Treasury bonds continued to rise, with the ten-year standing above the 4% threshold during the session.
Investors are awaiting the publication this week of reports on consumer prices and producer prices in the United States, which will provide new elements on the inflation picture.
Then several large American banks, such as JPMorgan, will unofficially kick off the results season on Friday.
“This is just speculation, what the Fed might or might not do, and the bond market has clearly rushed into anticipation of a first rate cut in March,” commented Tim Ghriskey, strategist at Ingalls & Snyder in New York, saying he expects further movement with economic indicators and results.
“The market is throwing itself one way or the other, trying to get ahead of what might happen,” he added.
While Atlanta Fed President Raphael Bostic on Monday stressed the need to maintain tight monetary policy, Gov. Michelle Bowman took a more dovish stance than usual, signaling she was willing to support a potential drop in rates due to slowing inflation. Most major sectors of the S&P-500 ended the session down, notably energy, which marked the largest decline (1.63%).
On the values side, among the movements of note, Boeing fell for the second consecutive session, by 1.41%, after concerns about the safety of its 737 MAX 9 aircraft in the United States.
Juniper Networks jumped 21.81% after a source told Reuters the group could be bought by Hewlett Packard Enterprise for $13 billion. HP fell 7.3%.
( Jean Terzian)
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