by Sinéad Carew and Johann M Cherian

(Reuters) – The New York Stock Exchange ended lower on Monday, the day after the chairman of the US Federal Reserve (Fed), Jerome Powell, indicated that more evidence of a lasting downward trend in the inflation to justify a reduction in key rates.

The Dow Jones index lost 0.71%, or -274.30 points, to 38,380.12 points.

The broader Standard & Poor’s 500 lost -15.80 points, or 0.32% to 4,942.81 points.

The Nasdaq Composite fell -31.28 points (0.20%) to 15,597.677.

The President of the Minneapolis Fed, Neel Kashkari, stressed for his part, in an essay published Monday, that a resilient economy could delay the timetable for monetary easing expected by the markets.

The ISM index published Monday in the United States shows that growth in activity in the services sector accelerated in January, more strongly than expected, to 53.4 after 50.5 in December.

This confirmed doubts about a rate cut, while employment figures published on Friday demonstrated the resilience of the labor market in the face of tight credit conditions.

The yield on ten-year Treasuries increased for the second day in a row and reached its highest level since last January.

“Chairman Powell cast a pall over the markets today,” said Jack Ablin, chief investment officer at Cresset Capital in Chicago.

But as Wall Street’s three major indexes limited their losses throughout the session, Jack Ablin said investors are likely mixed as positive economic data supports rising interest rates.

“Higher growth on the economic front gives the Fed more flexibility to keep rates high, knowing that they won’t kill the economy but still has a powerful weapon against inflation .”

As Monday’s decline in markets follows record closings for the S&P 500 and Dow Jones on Friday, Carol Schleif, chief investment officer at the BMO family office in Minneapolis, Minn., sees an opportunity for left-behind investors. side.

“The market got excited, especially in late November and December,” Carol Schleif said, adding that she “didn’t view this as the start of a significant pullback.”

In terms of values, Nvidia shares reached a new high on Monday after Goldman Sachs raised its price target on the semiconductor manufacturer against a backdrop of the boom in artificial intelligence (AI).

Caterpillar, considered a good barometer of the American economy, ended up 2% thanks to a solid quarterly profit supported by strong demand for construction equipment.

Estee Lauder rose 12%, driven by its job cuts plan.

Boeing fell after the U.S. manufacturer reported a new quality problem would extend lead times on some orders.

Tesla stock hit its lowest level in nearly a year after Piper Sandler cut the stock’s price target following a report that German software company SAP won’t will source more from the American for its executive cars, due to delivery delays and price fluctuations.

( Zhifan Liu)

Copyright © 2024 Thomson Reuters