Disappointment on Wall Street: what was supposed to be a rebound session ended in a downturn that spared virtually no sector, and especially not semiconductors, which fell by an average of -3%.

US indices saw their declines range from -0.12% for the Dow Jones, -0.58% for the S&P500 and -1.15% for the Nasdaq Composite. The Russell-2000 lost -1% to 1,948 (it ended at its lowest point since February 7 and has now lost more than -3.5% since January 1: the year 2024 is starting to look more and more like 2023 for the small caps).

The Nasdaq-100 fell -1.24% in the wake of ASML -7%, Autodesk -6%, AMD -5.8%, Lam Research -5.3%, KLA -5%, Micron -4.5%, Applied Materials -4.4%, Nvidia -3.9%, Broadcom -3.5%... (the 'SOXX' sector index dropped -3% to 210.50).

Paradoxically enough, the easing of bond yields did not support the 'technos', which is rather difficult to explain, unless we consider that the fall of Dutch ASML is representative of a more global trend affecting US stocks.

With economic indicators in the US surprising to the upside, investors are focusing on the resilience of the economy, which would compensate for the disappointment on the money front.

Investors want to continue believing that yields - now at their highest in 15 years - will cause only limited damage to the real economy. The day's economic agenda was devoid of any publications, and the Fed remained silent in the wake of Jerome Powell's statements.

Powell seems to be ruling out the prospect of a rate cut in June, and suggests that only two easings would be on the agenda in 2024. Rates would therefore remain above 5.25% for another six months, much longer than in previous up/down cycles (the 'plateau' lasts six months on average, nine months at most over the past 30 years).

Copyright (c) 2024 CercleFinance.com. All rights reserved.