Wall Street opens without clear direction, awaits the Fed

The New York Stock Exchange was trading in disarray on Tuesday, with investors exercising caution on the eve of the Federal Reserve's (Fed) monetary policy decision, while digesting a new burst of corporate results. Around 2:10 p.m. GMT, the Dow Jones lost 0.13%, while the Nasdaq index gained 0.30% and the broader S&P 500 index rose 0.11%. “We observe the usual calm on the market which precedes Fed meetings,” summarizes Christopher Low, analyst at FHN Financial, to AFP.

The American central bank - which meets Tuesday and Wednesday - is expected to leave its rates unchanged after an increase in September, the first since the summer of 2023. Market players, however, are counting on a further tightening before the end of the year, during the December meeting, according to the CME Fedwatch monitoring tool. “We are waiting for the press conference” after the publication of the decision on Wednesday “to see if Kevin Warsh (the head of the Fed, editor’s note) leaks any clue about the December meeting,” notes Christopher Low.

BBVA analysts believe that the institution could maintain a firm tone in the face of inflation which remains stubborn, in a context of conflict in the Middle East. While waiting for the Fed, on the bond market, the ten-year yield on American government bonds was almost stable compared to Monday's close, hovering around 4.99%. On the business side, operators digested a new batch of financial performances on Tuesday.

The aircraft manufacturer Boeing (-1.46% to $185.57) fell, despite a third quarter marked by good news, with the obtaining of highly anticipated certifications and the winning of large contracts, and a net result which approached balance. The American courier and parcel delivery group UPS (+1.67% to $101.99) was in demand after publishing on Tuesday an increasing turnover in the third quarter and raising its forecasts for the entire year. Beverage giant Coca-Cola lost 0.45%, suffering from falling demand in North America, despite results overall better than expected.

The airline JetBlue (+14.35% to $2.71) was gaining altitude, driven by comments from its director emphasizing that robust demand for travel helped to partly offset the surge in fuel costs in the third quarter. Wall Street now has its eyes fixed on the results of giants Microsoft and Alphabet (expected Wednesday), then Amazon (Thursday), in a context of concerns around massive investments to develop artificial intelligence (AI). This technology “has taken such a dominant place in the major stock market indices that the performances of technology groups have become, by far, the most important of the results season,” believes Christopher Low.

The day before, the sector had benefited from the filing of the IPO file for Anthropic (creator of the Claude chatbot), eagerly awaited by the markets, an operation which “gave new life to the AI ​​theme”, according to Patrick O’Hare, from Briefing. com. Anthropic is expected to list on Nasdaq in November, in what could be the largest IPO in history.

Machine-translated from French