Wall Street: Anguished by the inflation figures

(CercleFinance.com) – The New York Stock Exchange fell heavily on Friday, weighed down by US inflation at its highest: the Dow Jones dropped more than 2.7% to 31,393 points, while the Nasdaq Composite fell around 3.5% to 11340 points.

Investors were even more alarmed by the development of inflationary pressures in the United States, which showed no signs of easing, far from it, as shown by the latest statistics from the Department of Labor.

On an annual basis, the consumer price index thus posted an increase of 8.6% in May – a record since December 1981 and a level four times higher than the 2% target set by the Fed. .

‘This surprise surge and the general nature of the increase suggest that the Fed will continue to raise its rates aggressively in the second half,’ worried Liberum, for whom the scenario of a recession has become almost inevitable.

“It is becoming more and more obvious that the central bank started its reversal of monetary policy too late”, reacted for its part Commerzbank, for which “the era of large rate hikes of 50 basis points is far from over. gone’.

The difficulties of the American economy were already beginning to be reflected in certain indicators, such as the consumer confidence index of the University of Michigan which fell to 50.2 as a preliminary estimate in June, against 58 ,4 in May.

Yields on US government bonds also rose in response to the unprecedented strength of the latest inflation figures: the 10-year rate, the market benchmark, rose by 10 basis points to 3.15%.

Contrary to the trend of the first exchanges, AMD finally turned down to complete the session down 4% the day after an investor day for the chipmaker, however hailed by analysts.

Still on the technology stocks front, Netflix fell 5.1%, the title of the streaming giant having been downgraded to the sale by Goldman Sachs, worried about the impact of a possible recession affecting consumption on its results.

Wells Fargo dropped 6%, amid controversy after reports from the New York Times that the bank rigged job interviews reserved for candidates from diverse backgrounds.

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