NY stock markets close higher after Powell indicates restrictive Fed, but cites caution in decisions By Estadão Content

2023-08-26 09:55:41

© Reuters NY stocks close higher after Powell indicates Fed tightening, but cites caution in decisions

New York stock markets closed higher on Friday, the 25th, with recovery throughout the afternoon after having fluctuated unsteadily during a speech by Federal Reserve Chairman (Fed, the US central bank), Jerome Powell, who indicated his intention to maintain restrictive interest rates in Jackson Hole, but also stated that the US central bank should act more cautiously in the next decisions.

The index closed with an increase of 0.73%, at 34,346.96 points; o gained 0.67% to 4405.73 points; and o had an increase of 0.94%, at 13590.65 points. Compared to last Friday, the 18th, the Dow Jones fell 0.45%, the S&P 500 rose 0.82% and the Nasdaq gained 2.26%.

Powell’s speeches at the most anticipated event of the week reinforced that the Fed will be guided by data and signaled its inclination to maintain restrictive interest rates for longer – a harsher tone than expected, as commented by Inter’s senior economist, André Cordeiro . But, in the view of some analysts, this was nothing new. Economist Mohamed El-Erian, for example, said that the director opted for observations that do not bring anything new.

Against this backdrop, the market registered volatility during the session. The New York stock exchanges lost and regained steam, even going into the red and accelerating with gains close to 1% in the final stretch.

Tech companies, for the most part, rallied after Thursday’s slump. This was the case for Apple (NASDAQ:) (+1.26%), Amazon (NASDAQ:) (+1.08%) and Microsoft (NASDAQ:) (+0.94%). A portion of the chips segment posted gains, partially recovering from Thursday’s mostly red close, such as Intel (NASDAQ:) (2.03%). The exceptions were Marvell (-6.62%) and Nvidia (-2.43%), in the wake of their quarterly earnings, published this Friday and Wednesday, 23rd, respectively.

CMC Markets pointed out that Nvidia’s weakness, despite results that beat expectations, is a sign that “perhaps a lot of the good news was already priced in”. Marvell reported a drop in revenue and earnings per share of $0.33. “The numbers, in addition to the lukewarm guidance of modest increases in profit in the third quarter, made the shares continue to fall”, commented the consultancy.

Leading Dow Jones gains, Boeing (NYSE:) rose 2.81% after Bloomberg report that the airline has resumed delivery of 737 Max aircraft to China. The energy sector also stood out, with Chevron (NYSE:) and ExxonMobil (NYSE:) up 0.75% and 1.79% on the heels of higher oil prices.