New York (AFP)
The New York Stock Exchange ended sharply lower on Tuesday, the sharp decline in US interest rates reviving investor concerns about global growth in the midst of the trade dispute between Washington and Beijing.
Wall Street's flagship index, the Dow Jones Industrial Average, fell 0.93 percent to 25,347.77 points. It thus widens its decline after having, for the first time since 2011, recorded a series of five consecutive weeks of decline.
The Nasdaq index, with strong technological color, lost 0.39% to 7.607.35 points while the broad index S & P 500 dropped 0.84% to 2.802.39 points.
The indices, which had started the session in the green after a long weekend, have lost ground as the reference rate in the bond market declined, the interest rate on the debt from the United States to 10 years. The latter went down to 2.261%, its lowest level since September 2017.
This decline, which reflects a strong revival of an asset generally considered a safe haven in times of geopolitical uncertainties or economic slowdown, has taken the Wall Street brokers by surprise.
"The bond market players seem to be clearly thinking that the global economy is slowing down," says Karl Haeling of LBBW Bank.
Certainly, he points out, stock market developments are also traditionally driven by elements other than pure expectations of country growth, such as the fact that brokers are historically reluctant to buy stocks in May.
"But in the short term, the stock market is visibly provocative face the message sent by the bond market," he said.
In particular, investors are increasingly concerned about escalating trade tensions between the world's two largest economies.
The tone was brutally hardened in early May when Donald Trump decided to impose additional new taxes on more than $ 200 billion worth of Chinese goods. The conflict escalated further after the US administration's recent decision to blacklist Chinese telecom giant Huawei in the name of national security.
The US President did not bring much clarity Monday when he has both estimated from Japan, where he was on an official visit, that the United States was "not ready" to conclude an agreement with China but there was also "very good chance" to sign a text soon.
Investors also keep an eye on the situation in Europe where the negotiations are multiplying to designate the new leaders of the institutions of the Union after the European elections.
They "also wonder about the potential consequences of the $ 3 billion fine that the European Commission could impose on Italy for failing to comply with EU rules on debt and the structural budget deficit," they said. analysts at Mirabaud Securities.
? 2019 AFP