Negative start for Wall Street after some data confirming the resilience of the US economy, fueling fears of a still restrictive Fed for a long time.
After a few minutes of trading, the S&P 500 dropped 1.3% to 3,829 points, the Dow Jones recorded a more moderate drop of 0.9% while the Nasdaq Composite lost 1.8% to 10,510 points.
On bonds, the ten-year Treasury yield rises slightly to 3.68% while the two-year Treasury, more sensitive to monetary policy, increases to 4.26%.
Third quarter US GDP was revised up to +3.2%, up from +2.9% in the second reading. Furthermore, consumer spending rose by 2.3% (from +1.7% in the second estimate) and the core component of the personal consumer price index (PCE – the Fed’s preferred metric for monitoring the inflation) has been revised up to +4.7%, from +4.6% previously reported.
The labor market also continues to show a certain solidity, with initial unemployment claims increasing less than expected (216,000 units against an estimated 222,000).
Data that has unnerved the markets, looking for signs of a slowdown in growth and therefore in inflation.
Among individual stocks, chipmaker Micron Technology fell (-3.2%) after the release of the accounts for the first fiscal quarter of 2023 and the announcement of a restructuring plan. The company also forecast higher earnings per share in the current quarter than previously expected.
Vehicle retailer CarMax fell (-9.6%) after reporting lower-than-expected earnings, fueling concerns over the US used-car market.