The New York Stock Exchange ended another crazy week down on Friday, unable to find any semblance of momentum heading into the weekend and handicapped by a poor US macroeconomic indicator.
The Dow Jones lost 0.69%, the Nasdaq index, with strong technological coloring, dropped 2.18%, and the broader S&P 500 index, 1.30%.
The session had started in a climate of optimism, Wall Street being encouraged by the “positive progress” towards a diplomatic solution to the conflict between Russia and Ukraine, mentioned by Russian President Vladimir Putin.
But the mood darkened as the day progressed, especially after US Vice President Kamala Harris regretted that the Russian head of state “shows no signs of commitment to serious diplomacy”.
Fighting continued on the ground and Russian troops continued to target several major cities in the country, including Kyiv, which they seek to encircle.
“Reports that Russia is stepping up its invasion have dampened enthusiasm” among investors, Schwab analysts noted in a note.
“Nobody wants to take risks before the weekend,” commented Karl Haeling of LBBW bank, with the prospect of possible new developments in Ukraine while the market is closed.
On the bond market, the rate of two-year US government bonds rose to 1.76% for the first time in 30 months.
The yield curve is flattening more and more (short-term rates are moving closer to long-term rates), a sign that the market is preparing for a cycle of hikes by the American Central Bank (Fed), but is not unconvinced by the strength of long-term growth.
“The bond market seems to be more focused on high inflation and the Fed’s rate hike, while the equity market is more interested in Ukraine,” said Karl Haeling.
However, despite the jolts experienced by the markets over the past two weeks, Nasdaq (-1.48%), S&P 500 (-0.50%) and Dow Jones (-0.56%) are only slightly in -below their level of February 23, i.e. before the start of the invasion of Ukraine.
As often, with the return of risk aversion, growth stocks suffered, like Netflix (-4.61%), Tesla (-5.12%), or the cryptocurrency platform Coinbase (-7.46%).
The electric vehicle manufacturer Rivian slipped (-7.56% to 38.05 dollars) after announcing Thursday, after the stock market, that it planned to produce only 25,000 copies of its models, while analysts anticipated 40,000.
He dragged with him his competitors Nikola (-5.53%) and Lucid (-5.33).
The group of software and remote computing (cloud) Oracle (+ 1.53% to 77.82 dollars) benefited from encouraging growth forecasts.
Another difficult day for Chinese stocks listed on Wall Street, in particular for Yum China (-15.51% to 37.48 dollars), the group which controls the KFC, Taco Bell and Pizza Hut restaurants in China.
On Thursday, the US market regulator (SEC) ordered several Chinese companies, including Yum China, to comply with new legal accounting requirements, failing which they could be delisted by 2024.
None of the 248 Chinese groups listed in New York has so far complied with these obligations. The Chinese e-commerce giants Alibaba (-6.68%), JD.com (-8.63%) or Pinduoduo (-10.15%) suffered the backlash of the regulator’s first salvo on Friday.