Wall Street posted its third consecutive session of declines, but the session ended on a rather modest downturn (compared with the losses observed in early trading) and with relatively homogeneous scores (at 3.45pm, the Dow Jones was down 0.3% and the Nasdaq -1.3%).

The Dow Jones, back in the green at mid-session, dropped -0.25% S&P 500 was down 0.56% at 4.739 (led by Caterpillar with -3%, Disney -2.9%), the S&P 500 was down 0.56% at 4,740 (in the wake of mining and financials), and the Nasdaq -0.59% at 14,855.

NB: no Nasdaq-100 gains above +2.5% (Paypal), but declines of -3% on Zscaler, -2.1% on Microchip and On Semiconductors, -2% on Tesla (which will further cut prices and reduce production rates in Germany).

The Russell-2000 loses -0.9% to 1,909, and is already down more than 5% since January 1, against -1% at worst for the Dow Jones and Nasdaq.

With -0.65%, the S&P plunges into the red on January 17, 48 hours after a second historic test of the 4,800-pt mark, 2 years and 12 days after the January 3, 2022 "peak".
The associated 'VIX' jumped +7% and broke through the 14.80 barrier, signalling the end of the 'complacent' climate.

The consolidation was the result of bond yields continuing to rise, reaching a one-month high of 4.10% for ten-year yields. But the most significant movement - revealing a psychological shift - can be seen on the 2-year, which jumped +14pts to 4.36% on Wednesday (and 4.32% this evening).

The heaviness of the bond market was amplified by the stronger-than-expected retail sales figures for industrial activity in the US.
The scenario of a rapid rate cut by the Fed (at the end of March) is receding: the consensus, which was over 77% before the weekend, was down to 63% according to the FedWatch barometer on Tuesday evening.
It should fall below 50 with the series of 'stats' published at 2.30 pm.

The Commerce Department reported a 0.6% rise in retail sales last month, whereas economists were expecting a rise of only 0.4%.

And over a year, the rise to the end of December came to 5.6%, well above the 5.1% estimated.

Industrial production also came as a surprise: in total contradiction to the New York Fed's Empire State index published on Tuesday (which showed a sharp decline, and was even the lowest since May 2020), the Federal Reserve unveiled an unexpected +0.1% increase, thanks to the strong performance of consumer goods manufacturing.
The industrial capacity utilization rate stood at 78.6%, unchanged month-on-month.

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