Wall Street ends down, stunned by bond rates

The New York Stock Exchange ended sharply lower on Tuesday, scalded by an indicator showing a still strong American job market, which pushed bond rates to new heights.

• Read also: Drugs: Washington sanctions a Chinese network

• Read also: Republican leader Kevin McCarthy is playing his post in the US Congress

• Read also: Interest rates and inflation: financial stress jumps in Quebec

The Dow Jones fell 1.29%, the Nasdaq index lost 1.87% and the broader S&P 500 index lost 1.37%.

As in previous sessions, the tempo was dictated by the bond market, which saw the yield on 10-year American bonds catapulted to 4.80%, a first in more than 16 years.

The 30-year rate has also heated up, reaching its highest since September 2007, as has the yield on the 5-year maturity.

The new bout of interest rate fever was favored by the publication of the so-called JOLTS report on the movements experienced by the labor market in August. He highlighted the rebound in job offers (+7.8% compared to July), which demonstrates the robustness of the American economy.

“The Fed is not going to make a monetary policy decision based on this report, but it nonetheless maintains the risk of a further rate increase” by the end of the year, commented, in a note, Nancy Vanden Houten of Oxford Economics.

Operators now give the same probability to a final increase in the key rate by the end of the year as that of a status quo, whereas they saw this hypothesis as being in the minority just a month ago.

On the market, the title of the American pharmaceutical group Eli Lilly dropped 2.43%. It plans to buy the biotech Point Biopharma (+84.89%) for around $1.4 billion, in order to strengthen its position in cancer therapies, according to a joint press release.

With this operation, Eli Lilly – one of the largest producers of insulin in the world – will acquire a targeted therapy for prostate cancer, using radioligand therapy.

Airbnb suffered (-6.47%) from a note from KeyBanc which estimated that the momentum the platform had enjoyed coming out of the pandemic was running out of steam. On Monday, general manager and co-founder Brian Chesky felt that the time had come to “put the house in order”, citing user criticism, particularly regarding prices considered too high.

Source