Wall Street returns to the upside, with US indices closing at the day's high: while this was not enough for the Dow Jones (-0.25%), the S&P500 closed in the green (+0.3% at 5,078, 0.15% off its absolute best close), the Nasdaq advanced by 0.37% to 16,035 (5pts off its record high) and the Nasdaq-100 (+0.2%) finished 0.15% off its record high close of 18,000.000.

As it is customary for traders to end the month at the index highs, this looks good with 48 hours to go, provided the PCE inflation figure doesn't dampen Wall Street's spirits on Thursday.

The Nasdaq benefited from rises by Palo +4%, Micron +2.7%, Netflix +2.4%, Illumina +2%, Apple +0.8%, Alphabet +1%. The index failed to reach the 18,000 mark due to declines by Amgen -2.8%, Electronic Arts -2%, Adobe -1.5%, Broadcom -1%

As investors prepare for several key statistics to be released in the coming days, high valuations threaten to condemn the US stock market to a standstill.

At 23 times expected earnings, the S&P 500 index, already up more than 6% since January 1, is 35% above its 20-year historical average of 17x, according to Citi.

In this respect, Thursday's publication of the PCE index of consumer spending excluding food and energy, the Federal Reserve's preferred indicator for gauging inflation, will act as a test.

On the statistical front, US household sentiment deteriorated sharply in February (from 110.9 to 106.7 in monthly terms, versus 114.8 in the first estimate), according to the Conference Board's monthly survey published on Tuesday.

For Dana Peterson, the Conference Board's chief economist, this sudden deterioration reflects the persistent uncertainty surrounding the US economy.
The sub-index measuring respondents' judgment of their current situation fell to 147.2 from 154.9 the previous month, while the sub-index measuring their expectations dropped to 79.8 from 81.5 in January.

Orders for durable goods fell by 6.1% in January compared with December, following a sequential decline of 0.3% in December 2023, while the consensus was for -5%.

Excluding the usually erratic transportation sector, where orders plunged by 16.2% in January, US durable goods orders fell by just 0.3% last month.

On the bond market, the pause in the stock markets ('risk-on') and the day's mediocre figures do not favor a return to Treasuries, with the US ten-year yield hovering around 4.300% versus 4.285% on Monday.

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