Wall Street opened lower on Friday, after another disastrous week that took indices to near their lowest levels of the year, in a market depressed by the even harsher-than-expected tone from the US central bank ( Fed), Wednesday.
At around 14:05 GMT, the Dow lost 1.36%, the Nasdaq index lost 2.00%, and the S&P 500 index lost 1.73%.
After three consecutive sessions of relegation, the New York local was still entitled to a “terrible opening”, according to the expression of Peter Cardillo of Spartan Capital.
“Indices are poised to fall to year-over-year lows, fueled by fears of higher interest rates and of course a Fed that could go too far on monetary tightening,” the analyst said. .
The S&P 500 is, in fact, less than 100 points from its 52-week low, which dates back to mid-June.
After a summer rally, the indices suffered three setbacks, with Fed Chairman Jerome Powell’s proactive speech in late August, a worse-than-expected CPI inflation index in early September, and the communication from the Fed Wednesday.
“The question is whether we cross those thresholds,” Peter Cardillo summed up. “I hope we bounce back.”
Analysts at Goldman Sachs have significantly lowered their forecasts for the S&P 500 and now see the index widening to 3,600 points by the end of the year, from 4,300 now. It was trading slightly below 3,700 points on Friday.
After a wild rally since the beginning of the week, bond rates stabilized on Friday. The 10-year US government bond yield decreased slightly to 3.70% from 3.71% the previous day.
“The bond market is in disarray, which creates a difficult situation for the stock market,” according to Patrick O’Hare of Briefing.com. “But it’s not unique to the US. Things are choppy elsewhere, too,” with central banks around the world raising rates.
Despite Friday’s bond market pause, many stocks fell to their lowest level in at least a year on Friday, particularly in the tech sector, which has been hit particularly hard by rising rates, which is tightening the financing conditions for its growth.
Among them, Dell (-1.57%), HP (-1.93%), Intel (-1.98%), Micron (-1.16%) or Nvidia (-2.10%), which has lost nearly two-thirds of its capitalization in one year.
But berezine wasn’t limited to technology, with several “old” economy heavyweights also at their lowest since at least this time last year, since the Dow chemical group (-2.99%) to the conglomerate 3M (-0.52%), via Visa (-1.20%), the telecommunications operator AT&T (-1.39%) or Nike (-2.05%).
The atmosphere is all the more gloomy as nothing seems capable of reorienting Wall Street in the short term, pending the publication of the PCE price index for August next Friday.
Elsewhere in the stock market, Boeing was grounded (-4.20% to $132.89) after the announcement, on Thursday after the stock market, of an amicable settlement with the US market regulator, the SEC, which accused the planemaker of lying about the risks. presented by its 737 MAX aircraft. The transaction provides for the payment of compensation of 200 million dollars.
FedEx went back down again (-2.73% to 150.32 dollars) after publishing results well below market expectations, a week after a first advance communication. The group has announced a savings plan of 2.2 to 2.7 million dollars per year and an increase in its prices of at least 6.9% on average on January 1.
The semi-wholesale supermarket chain Costco was shunned (-2.31% to 475.93 dollars) despite the publication of a quarterly profit above expectations. The group has seen the cost of its products rise faster than its turnover.