Wall Street closes holiday-thinned day mixed

Google and Microsoft drag tech shares lower on Monday.
Financials rebound as bond market stays closed on Columbus Day.
DJIA pares early losses to end the day higher.

Eren Sengezer FXStreet

Major equity indexes in the U.S. started the day in the negative territory and pushed lower during the first half of the session before staging a modest recovery later in the day.

The negative impact of rising bond yields on equities faded on Monday as the bond market stayed closed due to the Columbus Day holiday in the U.S. "There is anxiety about how the bond market will reopen and when you get a little bit of a downturn, the sentiment just builds over it," Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas, told Reuters.

The S&P 500 Financials Index, which finished the previous week on a weak note, rebounded on Monday and closed the day 0.58% higher to help the financial-heavy Dow Jones Industrial Average outperform the S&P 500 and the Nasdaq Composite.

On the other hand, after a Wall Street Journal report revealed that Google failed to report a security breach to its social media, Google+, users, shares of Alphabet Inc (Google) plummeted on Monday to weigh on the technology sector. The S&P 500 Technology Index lost 1.18% on the day to record the biggest daily percentage of the 11 major sectors.

The Dow Jones Industrial Average added 48.21 points, or 0.18%, to 26,495.26, the S&P 500 closed virtually unchanged at 2,884.99 points, and the tech-sensitive Nasdaq Composite lost 52.17 points, or 0.67%, to 7,736.28.

DJIA technical outlook via FXStreet Chief Analyst Valeria Bednarik

The DJIA recovered from an intraday low of 26,215, its lowest since mid-September, and finished the day a handful of points below a still bullish 20 DMA, while technical indicators have turned flat around their midlines, indicating that selling interest keeps being overshadowed by bulls' determination to add on slides.

The 4 hours chart shows that the index flirted with a bullish 200 SMA at around the daily low, the first time it tests it since mid-August, and finished the day right below an also bullish 100 SMA, although the 20 SMA maintains a strong downward slope above this last. Technical indicators in the mentioned chart have recovered after hitting oversold readings, but remain below their midlines, in line with the daily perspective. The upside will look more constructive on a recovery above 26,534, the immediate resistance.

Support levels: 26,490 - 26,435 - 26,380.

Resistance levels: 26,534 - 26,591 - 26,660.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold moves away from one-week low, climbs above $4,450 as USD edges lower ahead of CPI

Gold builds on its modest intraday recovery from the $4,300 neighborhood, or a one-and-a-half-week low, touched earlier this Friday, and climbs above $4,350 heading into the European session. The upside potential, however, seems limited as traders opt to wait for the release of US consumer inflation figures before placing directional bets.

Cardano approaches critical support as correction risks grow

Cardano (ADA) recovers slightly, trading at $0.206 at the time of writing on Friday, inches above the critical support zone after losing more than 6% so far this week. Weakening derivatives data and fading bullish momentum suggest a bearish near-term outlook, with a decisive close below the support zone potentially triggering a deeper correction for ADA.

Oil and rates surging ahead of US CPI today

In commodities, brent jumped to USD 108/bbl last night and held that level overnight. This is adding renewed inflation pressure and feeding through into global rates markets. Markets are starting to realise that the Strait of Hormuz disruptions are not going away anytime soon, especially from recent comments that signal no clear resolution in sight.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.