Wall Street closes higher, the market confident in the US economy

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New York (AFP) – The New York Stock Exchange ended up on Thursday, resuming its forward march, after a break the day before, driven by good indicators which reassured about the health of the American economy.

The Dow Jones gained 1.02% to 34,707.94 points, the tech-heavy Nasdaq gained 1.93% to 14,191.83 points, and the broader S&P 500 index climbed 1.43% at 4,520.16 points.

Some 25 of the 30 Dow Jones companies ended in the green, led by semiconductor manufacturer Intel (+6.94% to 51.62 dollars).

On the Nasdaq side, the values ​​of the technology industry also shone, like Nvidia (+9.82%), AMD (+5.80%) or Broadcom (+4.51%).

“We see the markets stabilizing as they get used to the prospect of the Fed (US central bank) rate hike,” said Angelo Kourkafas, head of investment strategy at Edward Jones.

Traders now estimate an 80% chance that the Federal Reserve (Fed) will raise rates another 2 percentage points by the end of the year, compared to almost zero a month ago. .

The VIX index, which measures market volatility, tumbled 8% on Thursday to fall back to where it was a month and a half ago.

The equity market was encouraged by several good macroeconomic indicators in the United States, in particular the new weekly jobless claims, which were well below expectations and the lowest in more than 52 years.

“It’s so low that it shows the strength of our economy,” commented Kim Forrest, chief investment officer at Bokeh Capital Partners.

“This is one more indicator which testifies to the fact that the job market is very strong and tense”, added Angelo Kourkafas.

Another good surprise, the PMI activity index in the United States emerged at its highest level for eight months in March, a performance higher than expected by economists. The jump was recorded in both services and industry.

These data “validate the speech of Jerome Powell”, president of the Fed, according to which “the (American) economy is able to collect a series of rate hikes this year”, according to Angelo Kourkafas.

While the equity markets paraded, the bond market suffered again. The yield on 10-year US government bonds was 2.35%, down from 2.29% the previous day. Bond prices move in the opposite direction to interest rates.

After a month of war and despite signs of a stalemate in Ukraine, Wall Street seems to have relegated the conflict to a certain extent to the background and remained optimistic on Thursday.

“Coordination at the level of NATO and the hope of a ceasefire are driving the actions”, according to Kim Forrest. The United States and the United Kingdom announced a new wave of sanctions on Thursday, which notably targets several Russian and Belarusian companies.

A sign of renewed appetite for risk and confidence in the outlook for the American economy, several stocks in the tourism sector sparked, among them Booking (+4.73%), Expedia (+4.32%) or Airbnb (+4.06%).

After its collapse in February and early March, Meta Platforms (ex-Facebook) continued its recovery (+2.86% to 219.57 dollars).

Uber passed the second (+4.96% to 34.70 dollars), after the group indicated that it would now integrate all New York taxis on its platform, at rates similar to those of the Uber X base plan.

Still supported by high commodity prices, steelmakers US Steel (+6.50%) and Cleveland-Cliffs (+12.04%) were favored by buyers.

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Wall Street closes higher, the market confident in the US economy