The New York Stock Exchange ended a turbulent session on Tuesday after US inflation slowed less quickly than expected and its persistence pushed bond yields sharply higher.
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The Dow Jones index fell 0.46% to 34,089.97 points and the S&P 500 0.03% to 4,136.13 points, while the tech-heavy Nasdaq climbed 0.57% to 11,960.15 points.
Inflation in the United States remained strong in January, slowing less-than-expected over a year and accelerating during the month for the first time since October, according to the CPI index released on Tuesday.
Consumer prices rose 6.4% over the year versus 6.5% in the previous month when 6.2% was expected. And in just one month, the price increase accelerated to 0.5%, after +0.1% in December (figure revised upwards from -0.1%).
“Financial markets tend to look at monthly numbers rather than yearly numbers, which show only one month of new data and eleven months of data,” said Steve Sosnick of Interactive Brokers (IBKR).
In particular, the analyst insisted on the revision of monthly inflation for December, which went from -0.1% to +0.1%: “People got excited when Fed Chair Jerome Powell mentioned the word disinflation. This was probably correct since inflation was negative. But that’s not quite what we’re seeing,” noted Mr. Sosnick.
“This inflation news is not the market’s friend and we have seen that the bond market has not been happy,” the IBKR analyst continued.
Yields on two-year Treasury bills rose 10 basis points to 4.61% and 10-year yields rose to 3.74% from 3.70% the previous day, their highest since the beginning of the month.
According to Mr Sosnick, the stock market, which went from red to green several times during the session, ended partially on the upside on testimony from a member of the Fed.
Patrick Harker of the Philadelphia Fed said the central bank is nearing the end of its rate hike cycle. “It’s true that we’re closer to the end than the beginning, but that doesn’t really matter. The market, which is in an uptrend, is looking for any excuse to go up,” the analyst further commented.
On the value side, Boeing (+1.29%) started after a large firm order of 190 Boeing 737 MAX, 20 long-haul B787 and 10 B777X from Air India. In a letter of intent from the Indian company, more than 200 aircraft have also been ordered from Airbus.
The Nasdaq was driven by Tesla (7.51%), which raised some prices and is also preparing a meeting of its investors for early March.
Graphics card maker Nvidia rose 5.43%, capitalizing on the surge in enthusiasm among gamers in the field of artificial intelligence.
Despite strong Q4 results, Coca-Cola fell 1.67%, thanks in large part to price hikes.
The group expects inflation to slow this year, but that will dampen the growth of its annual sales in 2023.
Data analysis specialist Palantir, which turned a profit for the first time since its inception in 2033, saw its price rise 21.16% to $9.22.
Airbnb is up 3.82% and is up nearly 9% in post-close electronic trading. The tourist rental platform beat forecasts for its revenue of $1.9 billion in the most recent quarter and its forecasts for the first months of 2023 are better than expected.