- Industrials slip as tariffs go into effect.
- Headlines surrounding U.S. Deputy Attorney General Rod Rosenstein weigh on the sentiment.
- WTI jumps to 11-week highs above $72 to boost energy sector.
With import tariffs of the United States and China on each other going into effect on Monday, global equity indices took a defensive stance, and Wall Street pushed lower after starting the day in the negative territory. In addition to trade worries, the political drama surrounding the U.S. Deputy Attorney General Rod Rosenstein further weighed on the market sentiment. The CBOE Volatility Index, Wall Street's fear gauge, gained around 5% to reflect the risk-off mood.
The trade-sensitive S&P 500 Industrials and the S&P 500 Consumer Staples indexes lost 1.5% and 1.32%, respectively, on the day. "The Rosenstein stuff is just another negative story that is piling on top of other stories out there today, China obviously being the biggest negative, that is the one that really has the potential to price stocks," Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York, told Reuters.
On the other hand, following the OPEC+ meeting in Algiers, crude oil prices rallied on Monday with the barrel of West Texas Intermediate surged to its highest level since July at $72.70 to help the S&P 500 Energy Index close the day 1.5% higher despite the negative sentiment.
The Dow Jones Industrial Average dropped 181.25 points, or 0.68%, to 26,562.25, the S&P 500 erased 10.14 points, or 0.35%, to 2,919.53 and boosted by the 0.3% gain seen in the S&P 500 Information Technology Index, the Nasdaq Composite gained 7.47 points, or 0.09%, to 7,994.42.
DJIA technical outlook via FXStreet Chief Analyst Valeria Bednarik
The daily chart for the Dow shows that the index barely lost upward strength, as indicators have just begun correcting extreme overbought conditions, while the index holds well above bullish moving averages, with the 20 DMA some 450 points below the current level.
Shorter term, and according to the 4 hours chart, however, the index could continue shedding ground, as the index broke below its 20 SMA, now losing upward strength, the Momentum indicator heads south below its 100 level, while the RSI indicator is trying to stabilize at around 54.
Support levels: 26,546 - 25,498 - 25,446.
Resistance levels: 26,626 - 26,677 - 26,732.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.