Wall Street analysis: futures sunk on Trump
|- Risk-off rules as Trump threatened with $200 billion worth of Chinese goods for additional tariffs.
- Government debt soars, yields plunge. Safe-havens struggle between panic and a hawkish Fed.
As US President Trump threatened with $200 billion worth of Chinese goods for additional tariffs, at a rate of 10%, markets entered panic mode. Safe-haven assets are reacting in a mixed fashion, as gold remains flat, unable to rally after the latest Fed's hawkish announcement, but the Japanese yen is up, and the USD/JPY pair nears the base of the last three-week range at 109.20.
US government debt soared and yields plunged, down on average 5 basis points from Monday's close.
As for equities, the Dow Jones Industrial Average is set to open over 300 points lower, after closing yesterday at 24,987, now at 24,660. The Dow's daily chart shows that the index has broken below its 20 DMA, and currently converges with the 100 and 200 DMA. The pair index has been developing in a bullish fashion, and in an ascendant channel which base broke a couple of times before quickly reentering it. The base today comes at 24,512 and a break below it should trigger additional slumps that can extend to 24,243, May 29th low if the sell-off continues.
The S&P is down to 2,740 after closing Monday at 2,773, having already broken below its 20 DMA, but still above the larger ones. Technical indicators in the daily chart have turned abruptly lower, with the RSI already in negative territory. The index is close to a 2-week low of 2729, the immediate support, which break could lead to additional slides toward the 2,700 region, where it bottomed multiple times last May.
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