Wall Street ends higher after the Fed’s monetary decision

(New York) The New York Stock Exchange has paradoxically marked a sharp increase of half a percent, announced by the US Federal Reserve (Fed) on Wednesday, because it currently precludes a more serious increase.

Updated yesterday at 16:12.

According to the final results at the close, the Dow Jones rose 2.81% to 34,061.06 points. The high-tech NASDAQ jumped 3.19% to 12,964.86 points, while the S&P 500 rose 2.99% to 4,300.17 points.

The S&P / TSX index on the Toronto Stock Exchange rose 279.67 points, or 1.3%, ending the session from 21,184.95 points.

“It’s time for parties on Wall Street, bond yields are falling. After all, the Federal Reserve was not so cruel, “said Joe Manimbo of Western Union.

“This is reflected in the fact that the Fed seems to rule out an increase of 0.75 percentage points” in the future, the analyst said.

Even as he approved a 50-point increase in key rates, as expected by markets – the first in more than 20 years – the FOMC seems more cautious about the possibility of a more serious increase of 75 basis points, which investors feared.

A 0.75 percentage point increase is “not expected,” Fed Chairman Jerome Powell told a news conference after the committee’s decision.

Thus, overnight rates are fixed at 0.75% to 1%, but other increases of 0.50% are “planned for the next two meetings” in June and July, “Powell said.

“This is a question for September, we will have to look at the data, if inflation is moderate,” – said a Western Union analyst.

The Fed’s balance sheet will also begin to decline at a rate of $ 47.5 billion per month from 1is June and up to 90 billion in three months – another way to increase the cost of credit to curb demand and rising prices.

Bond yields declined significantly: on two-year bills fell to 2.63% against 2.78% the day before. Yields on ten-year treasury bills fell to 2.92% from 3% at the beginning of the session.

All eleven S&P sectors finished high in the green, leading in energy (+ 4.11%), while oil prices jumped by more than 5%, followed by communications services (+3, 68%) and information technology (+ 3.51%).

Airbnb’s rental platform jumped 7.71% to $ 156.18. It raised its sales forecast for the second quarter and managed to sharply reduce losses in the first.

Starbucks rose 9.83% to $ 81.64. The American coffee giant managed to compensate for the sharp slowdown in its activity in China in the first quarter by a push in the United States, where it wants to strengthen the development of “drive-in” outlets, where customers are served in their vehicle.

Shares of the vaccine manufacturer COVID-19 Moderna rose 5.81% to $ 155.05. The lab announced higher-than-expected quarterly sales of its $ 5.93 billion COVID-19 vaccine, its only product.

Uber, a car rental company with a driver and food delivery specialist, lost 4.65% to $ 28.10, despite doubling turnover in the first quarter, driven by rising prices. Uber is still losing, but is betting on continuing to grow by 2and trimester.

The title also pulled down due to the fall of its rival Lyft, which fell 29.91% to $ 21.56. The group recorded a larger-than-expected loss of 1is quarter and indicated that he needed to invest more to increase his fleet of drivers.

from The Canadian Press

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