The New York Stock Exchange celebrated, on the rise, a slowdown in US inflation in July which could lead the Federal Reserve (Fed) to be less severe regarding rate hikes.
Around 4:35 p.m. GMT, the Dow Jones index climbed 1.59%, the Nasdaq jumped 2.24% and the S&P 500 1.74% after the publication of a stable consumer price index over one month and 8.5% instead of 9.1% in June, over one year.
“This is good news on inflation which is broadly unchanged while core inflation is as expected,” reacted Peter Cardillo of Spartan Capital.
“Of course, this is not the end of the price increase, but it indicates that we are going in the right direction (…) and the market is enthusiastic,” he added.
The CPI price index did not move over a month in July, while that of underlying inflation (excluding food and energy) advanced by 0.3% over the month and by 5.9% against 6 .1% over one year.
Calming inflation means “it’s likely the Fed won’t be as aggressive as it has been in the last two currency meetings,” Art Hogan of B. Riley Wealth told AFP.
The Federal Reserve recently raised overnight rates twice by three-quarters of a percentage point.
However, immediately after the publication of the inflation index, the chances of a further 75 basis point hike in the Fed’s rates in September rose from 68% on Tuesday to 38% this morning.
According to CME Goup’s futures calculations, a large majority of investors are now betting on an upcoming rise of just half a percentage point.
“The market is going to celebrate that,” Hogan concluded.
Ten-year bond yields fell sharply in the process before moderating this decline to 2.76% and the spread with two-year rates narrowed, even if these remain paradoxically higher than ten-year rates years (3.14%).
The dollar meanwhile fell 1.32% against the euro to 1.0320 dollars for one euro.
Listed, Tesla shares climbed 2.50% to 871.27 dollars, while its boss Elon Musk sold nearly 7 billion dollars of shares, a “poker move” from the multi-billionaire who could for example predict an amicable compensation in the aborted takeover of Twitter, suggested to AFP Dan Ives, analyst at Wedbush Securities.
Twitter climbed 2.86% to $44.06.
Shares of cryptocurrency exchange Coinbase rallied 4% the day after the publication of disappointing second-quarter results that caused its price to fall sharply.
the hotel group Wynn Resorts yielded 0.05% after a larger loss than expected in the second quarter and a falling turnover.
The title of the video game platform Roblox fell 4.27% to 45.33 dollars the day after an announcement of the announcement of a loss more severe than expected while the number of daily players at 52 million was more lower than expected.