The facade of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/SPENCER PLATT)
The New York Stock Exchange closed sharply higher on Friday, still buoyed by hopes that inflation has peaked, which would ease the Fed’s monetary policy going forward.
According to the final results, the Dow Jones index rose 1.27% to 33,761.05 points, the Nasdaq rose 2.09% to 13,047.19 points and the S&P 500 rose 1.73% to 4,280.15 points and experienced making it its fourth positive week in a row, the longest period in the green since November.
Over the week, the Star Shares Index gained 2.92%. The increase is 3.08% for the tech-dominated Nasdaq and 3.26% for the S&P 500, the most representative index of the American market, which has also been in the green over the past four weeks.
Markets were mainly driven this week by the good news regarding inflation, while July consumer prices in the United States rose 8.5% over the year from 9.1% in the previous month, indicating a peak suggests.
This gave relief to Wall Street, which is hoping the Federal Reserve (Fed) will be less harsh on interest rates going forward.
“There has been a change of heart after better data on inflation. But is that justified?” asked Cresset Capital’s Jack Ablin skeptically.
“It could mean that the expectations are too ambitious. It could be that some optimistic investors are pushing a little too much,” he said.
The next central bank monetary policy meeting is scheduled for September 21 and by then there will still be the CPI release, but investors are already pricing in a half a percentage point hike instead of three quarters of a point (0.75%) , like the last two times.
Some Fed members have therefore tempered the enthusiasm by reminding, like the San Francisco Fed’s Mary Daly on Thursday, that a 75 basis point turn of the screw remained on the table.
– Household morale improves –
Other good news released on Friday was the University of Michigan Consumer Confidence Index, which came in much better-than-expected at 55.1 in August, up from 51.5 in July after surmounting all-time lows set in June .
The dollar regained strength, the dollar index, which measures the greenback against a multi-currency basket, was up 0.56% around 20:20 GMT while the euro lost 0.61% to $1.0266 on the downside due to recession fears in the euro zone due to the sharp rise in energy prices.
On the stock market, Disney remained in demand (+3.30%) following the announcement of solid results, a surge in new Disney+ subscribers and the announcement of new streaming offers, either more expensive or with advertising.
Tech mega caps pulled on the Nasdaq like Alphabet (+2.36%), Tesla (+4.68%), Apple (+2.14%). The microprocessor manufacturer, which was hit last week after a disappointing profit warning, recovered again (+4.27%).
The market warmly congratulated exercise bike maker Peloton (+13.60% to $13.53), which will cut 800 jobs and close stores to become more profitable.
Five major Chinese corporations, including oil majors Sinopec and PetroChina and aluminum heavyweight Chalco, which are listed on Wall Street via American certificates of deposit, have announced that they will soon withdraw from the New York Stock Exchange due to transparency rules demanded by the American stock exchange police officer SEC.