New York (EFE) interest rates to curb inflation.
The Dow Jones Industrials, which brings together 30 large listed companies in the country, is the worst-performed index, with a monthly loss of 4.2%, which erases the accumulated gains since the beginning of 2023 and leaves an annual loss of 1.48 %.
The S&P 500 is down 2.6% per month and the Nasdaq is down 1.1%, but these indices are still in the green over the course of the year thanks to strength in the tech sector, with annual gains of 3.40% and the 9.45%, respectively.
Last week already heralded that the month would end badly and the slight rebound on Monday had little or nothing to do with an increasingly generalized expectation in the market: that the US central bank would toughen rate hikes instead of loosen them.
The rises of the FED and its influence on Wall Street
This has been suggested by various officials at the Fed, both in their defense of a further rise in rates soon, of 50 basis points, and of keeping them high for longer than expected to fulfill their mandate of placing inflation at 2%.
Although inflation stood at 6.4% in January, a notable drop from the peak of 9.1% in June 2022, analysts await the February data with caution in light of other measures such as the expense index personal consumption, which was worse than estimated.
“Throughout February there was a growing awareness that the US economy really isn’t responding enough to the Fed’s hikes,” the chief global strategist at Principal Asset Management told The Wall Street Journal.
This idea has been reflected in the yields on public debt, which in the case of the 10-year Treasury bond stood this Friday at a peak of 3.98%, not seen since last November.
Another sign of investor distrust has been that they have withdrawn their money from assets considered safe such as gold and silver, which have closed their worst month in more than a year: the first, with a loss in value of 5.58%. and the second, 11.6%.
By sectors, the most affected in February was energy, more than 9%, followed by real estate, communications and public services, which have fallen by around 4.5%, according to the firm Fidelity analysis.
By contrast, the Non-Core Goods, Technology and Industrials sectors have remained afloat with monthly gains of less than 0.5%, contributing to moderate falls in the S&P 500 and Nasdaq on Wall Street.