US equities' recovery continues, but fears persist

  • All of the US three major indexes advanced over 1.0% each.
  • Trump unveiled its infrastructure investment plan, but market not convinced.

Wall Street recovery continued this Monday, with all of the three major indexes adding over 1.0% each. The Dow settled at 24,600.24, up 409 points, after trading over 500 points higher mid-US afternoon. The Nasdaq closed at 6,981.96, while the S&P added 36 points and ended at 2,656.00.

Despite fears of rising inflation persists, equities found support in Trump's infrastructure investment plan, unveiled today. The US President proposed a $200 billion federal investment, aimed to spur additional private and local funding, although investors are not yet fully convinced that will take place. Furthermore, and according to the plan, it will take another decade to balance the US budget, just a couple of days after the government avoided for the umpteen time a shutdown over these last few years, and having experienced one in January.

US Treasury yields, in the meantime, closed with gains, but off their pre-opening fresh 4-year highs. The 10-year note benchmark settled at 2.86% from a previous 2.83%, while the 30-year note yield ended unchanged at 3.14%.

Technical outlook

The Dow Jones Industrial Average  settled above the 61.8% retracement of the last week's slump, and technical readings in the daily chart suggest the advance may continue, at least until Wednesday's US inflation release, given that the index settled well above its 100 DMA, while technical indicators recovered from oversold territory although with limited upward strength.  The daily high, set at 24,763 is the immediate resistance, while the mentioned Fibonacci level provides support around 24,592.

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