On global stock markets, caution prevails, Wall Street rises

On Wall Street, stock prices rose again last week, for the second consecutive week, while trading on other major stock exchanges around the world was more cautious due to high inflation and the possibility of further tightening of monetary policy.

On Wall Street, the Dow Jones rose 0.7 percent last week, to 34,283 points, while the S&P 500 strengthened 1.3 percent, to 4,415 points, and the Nasdaq index increased 2.4 percent, to 13,798 points.

After stock prices surged a week earlier, thanks to investor confidence that the interest rate hike cycle was over, trading on global stock exchanges was more cautious last week. Investors were unsettled by Fed Chairman Jerome Powell, who said on Thursday that further tightening of monetary policy was possible. At the International Monetary Fund meeting, Powell stated that he was pleased with the easing of inflation but was not sure that the Fed had done enough.

– The Fed is determined to set a sufficiently restrictive monetary policy to bring inflation down to the target level. I am not sure we have achieved that yet – Powell said.

Analysts say Powell has put investors on alert.

– Powell has taken a firm stance. He has signaled to the market that the fight against inflation is not yet won and if the economic situation requires it, he will not hesitate to raise interest rates further – explains Peter Cardillo, an economist at Spartan Capital Securities.

In addition to Powell, many other Fed officials have indicated that another interest rate hike is possible, given that inflation remains significantly above the Fed’s target level of 2 percent. Despite these messages, most analysts believe that this will not happen. However, they estimate that the Fed could keep interest rates elevated for longer than previously expected.

As a result, trading was cautious throughout the week. The weekly rise of Wall Street is attributed solely to the surge in stock prices of tech giants such as Microsoft, Meta, and Nvidia at the end of the week.

– In an environment of high interest rates and slowing economic growth, investors assess that it is best to allocate capital to the stocks of tech giants – says Rick Meckler, a partner at Cherry Lane Investments.

Meanwhile, on most European exchanges, stock prices fell. The London FTSE index slid 0.8 percent last week, to 7,360 points, while the Paris CAC fell 0.1 percent, to 7,045 points. The Frankfurt DAX, on the other hand, strengthened by 0.3 percent, to 15,234 points.