The New York Stock Exchange ended on a mixed note on Monday, lacking enthusiasm ahead of a decisive meeting of the US Federal Reserve (Fed) on Tuesday and Wednesday.
The Dow Jones (+0.55%) nevertheless recorded a new closing record, while the Nasdaq index lost 0.52% and the broader S&P 500 index 0.13%.
The last high of the flagship New York index was dated August 30.
“The market remains stormy”said Angelo Kourkafas of Edward Jones, investors have already focused their eyes on the Fed meeting.
Unusually, operators and economists do not have a clear vision of the decision that the institution is preparing to take, and hesitate between a reduction in the key rate of half a point and a quarter point.
Since 2001, the Federal Reserve has chosen a half point five times and a quarter point only once.
Stakeholders attribute a 63% probability to the scenario that includes half a point, compared to only 30% just a week ago.
“The inflation target is in sight” (at 2%), and if “the economy is slowing, it’s not sliding”answer the analysts of High Frequency Economics to those who bet on a half point cut, arguing for only a quarter point.
A drop of a quarter point could turn Wall Street against its grain and lead to a negative reaction in the short term, warns Angelo Kourkafas, but “As long as the economy manages to avoid recession, it should be positive for stocks.”.
The bond market noted a possible drop of half a point, with the yield on US Treasuries falling to 3.55% from 3.58% at Friday’s close.
In this volatile climate, investors did not abandon the market.
“We’ve seen portfolio rotations”especially against traditional economic values, which allowed the Dow Jones to reach a new all-time high.
Bank stocks were particularly popular and also benefited from the prospect of the start of monetary easing by the Fed, which will shrink short-term rates and improve their margins.
Goldman Sachs (+1.29%), JPMorgan Chase (+1.73%) and Citigroup (+1.25%) ended up in the green.
Industrial stocks were also in demand, such as 3M (+1.07%), Dow (+0.55%) and Honeywell (+0.26%).
The health sector was also in the spotlight, such as the Merck (+2.49%) and Pfizer (+2.73%) laboratories.
The big loser in this movement was the semiconductor sector, such as Nvidia (-1.95%), Broadcom (-2.19%) and Micron (-4.43%).
Notable exception, Intel (+6.36%), supported by the announcement of a contract with the US government worth up to $3 billion.
The Nasdaq was also affected by the fall of Apple (-2.78%), by far the first weight of the index with almost 9% of the whole.
Operators attacked the Apple title after the publication of several analyst notes, according to which the pace of orders for the new iPhone 16 was less sustained than during the launch of the iPhone 15 last year.
Disney (+1.44%) benefited from the broadcast deal signed with satellite operator DirecTV, after two weeks of blocking. The entertainment group’s channels will once again be accessible to the more than 11 million subscribers of the satellite package.