Wall Street down sharply after inflation picks up – 06/10/2022 at 15:46


WALL STREET OPENS SHARPLY LOWER

PARIS (Reuters) – The New York Stock Exchange opened sharply lower on Friday, an hour after the announcement of a further acceleration in inflation in the United States which increases the risk of an accelerated increase in interest rates of the Federal Reserve.

A few minutes after the start of trading, the Dow Jones index lost 555.28 points, or 1.72%, to 31,717.51, the Standard & Poor’s 500 fell 1.9% to 3,941.68 and the Nasdaq Composite gave up 2.13% to 11,504.43.

The US consumer price index (CPI) rose 1% in May and its year-on-year rise is now 8.6%, higher than expected figures which support the scenario of a continuation of the strategy. rapid rise in interest rates.

The Fed is meeting next Tuesday and Wednesday and it should once again opt for a half-point increase in the rate target for “fed funds”, the main instrument of its monetary policy, at the risk of slowing growth , or even tip the US economy into recession.

“We have reached a very interesting stage where inflation remains high, where there are strong concerns about the prospects for growth and where, at the same time, people are trying to imagine to what extent precisely this will end up having a impact on corporate earnings,” said Eric Johnston, head of equity and multi-asset derivatives at Cantor Fitzgerald.

None of the 30 Dow Jones stocks escaped the decline and among the most marked declines, Salesforce lost 2.52%, Microsoft 2.62% and Dow 2.51%.

Netflix also lost 5.35% after the lowering of Goldman Sachs’ recommendation to “sell”, which the bank justified by the deterioration of the economic outlook.

Investors will watch at 2:00 p.m. GMT the first results of the monthly survey of the University of Michigan on the morale of American households.

(French version Marc Angrand)

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