The New York Stock Exchange closed lower on Monday, lagging behind after two flamboyant days of Thursday and Friday, due to lack of conviction in a market unable to find lasting momentum.
The Dow Jones fell 0.63%, the Nasdaq index fell 1.12%, and the broader S&P 500 index fell 0.89%.
Wall Street failed to chain a positive third session following Thursday and Friday’s heatstroke, which notably saw the Nasdaq gain over 9% in two days.
“Since there has been little news this weekend, it is normal for the market to struggle to find direction,” commented Regent Atlantic’s Andy Kapyrin.
During the session, Dow Jones and the S&P 500 spent some time in the green after a speech by US Central Bank (Fed) Vice President Lael Brainard, who explained that he anticipated a slowdown in monetary tightening “soon”.
But the thinning did not last and the three major New York market indices all ended up in sharp decline.
After the weekend surge, the Nasdaq froze, partly held back by the hike in bond rates. The 10-year US government bond yield stood at 3.86%, up from 3.81% on Friday.
As for the technology giants, they mostly lowered the flag, such as Microsoft (-2.25%), Amazon (-2.28%) and Tesla (-2.56%).
On the other hand, among the few stocks to float are mainly defensive stocks, ie theoretically less sensitive to changes in the economy, such as the Merck laboratory (+ 2.44%) or the Johnson & Johnson conglomerate (+ 1.57%).
“What I learned last week is that investors want to buy stocks, but they need a good reason to do so,” says Andy Kapyrin. In this case, it was a lower-than-expected inflation figure released Thursday that set Wall Street on fire.
For Nick Reece, of Merk Investments, these upheavals testify to a “bear market rally,” meaning a short-lived upward current that is part of a longer cycle of decline.
Peter Boockvar, of Bleakley Financial Group, recalled that in October 2008, in the heart of the financial crisis, Wall Street had recorded several increases of more than 10% in a single session, only to plummet again a few weeks later.
“I don’t think the movement” observed on Thursday and Friday “is credible,” said Nick Reece. “The preferred path remains that of decline”.
On the stock exchange, the implosion of the second cryptocurrency trading platform in the world, FTX, which went bankrupt, penalized the entire sector, from the Coinbase platform (-7.56%) to the virtual currency mining companies Riot Blockchain (- 3.75%) and Marathon Digital Holdings (-2.56%).
“Apart from a handful of stocks that are directly involved in this space, such as Coinbase, I don’t think there is any contagion between the cryptocurrency universe and traditional investments, including stocks,” said Andy Kapyrin.
The AMC cinema chain rose (+ 1.94% to $ 7.34), the day after an encouraging weekend for dark room activity, marked by $ 180 million in the North American box office from “Black Panther: Wakanda. Forever “, second part of the Marvel and Disney saga.
The American laboratory Opiant Pharmaceutical (+ 113.83% to 20.10 dollars) was pushed by the announcement of its acquisition by British Indivior, for approximately 145 million dollars.
A healthy little player, Opiant has made a name for himself with his drug Narcan, which can block the effect of opiates in the body and thus save an overdose victim.