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Wall Street ends choppy session slightly lower as investors wait for G20 summit

  • Technology and financials fall on Thursday.
  • Crude oil recovery boosts energy.
  • FOMC minutes confirms December rate hike.

Major equity indexes in the U.S. stayed relatively calm on Thursday following yesterday's impressive rally and finished the day with small losses after failing to stay in the positive territory in the session. 

The minutes of the FOMC's November meeting reaffirmed expectations that the Fed would go for another 25 bps rate hike in December. "Almost all participants expressed the view that another increase in the target range for the federal funds rate was likely to be warranted fairly soon," the statement read. Regarding further rate hikes, the FOMC noted that a couple of participants voiced their concerns over the potential negative impact of further rate increases on the expansion of economic activity and inflation expectations.

Commenting on the FOMC minutes, "The governors in their gentle way seem to be noting a change of circumstances. To say that they see trouble ahead would overstate the case greatly, but the tone of the economic picture has shifted. A few warning signs are appearing, it is best to keep the options open," FXStreet senior analyst Joseph Trevisani said.

Meanwhile, confusing headlines surrounding the U.S. - China trade conflict today forced investors to stay on the sidelines ahead of this weekend's crucial G20 summit.

Boosted by a more-than-2% recovery seen in crude oil prices on Thursday, the S&P 500 rose 0.58% to become the best performing sector out of the 11 major sectors in the S&P 500. On the other hand, the S&P 500 Technology Index dropped 0.95% and the S&P 500 Financials Index lost 0.8%.

The Dow Jones Industrial Average dropped 27.59 points, or 0.11%, to 25,338.84, the S&P 500 fell 5.99 points, or 0.22%, to 2,737.8 and the Nasdaq Composite lost 18.51 points, or 0.25%, to 7,273.08.

DJIA technical outlook by FXStreet Chief Analyst Valeria Bednarik

Despite closing lower, the Dow posted a higher high daily basis and held above its 20 and 200 DMA, somehow leaning the risk toward the upside. Technical indicators in the daily chart, however, have turned flat within neutral levels, indicating that an upward extension ahead is still unclear.

In the shorter term, and according to the 4 hours chart, buyers surged on a retracement toward the 100 and 200 SMA, both still converging directionless, as the 20 SMA extended its advance below them. Technical indicators in this last time frame eased just modestly, still holding in oversold readings, suggesting there's no selling interest around.

Support levels: 25,309 - 25,244 - 25,190.

Resistance levels: 25,427 - 25,480 - 25,539.

Author

Eren Sengezer

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.

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