Wall Street kicks back on trade war headline Turnaround-Tuesday


 

  • DJIA, climbed 382.20 points, or 1.48%, at 26,279.91
  • Nasdaq Composite index climbed 152.95 points, or 1.95%, to 8,016.36.
  • S&P 500 index added 43.23 points, or 1.5%, to 2,926.32.

On Tuesday, positive US-China trade headlines sent the markets risk-on for a turnaround Tuesday that sent US benchmarks screaming higher on Tuesday. Communications between the US and China seem to be back online with a number of headlines confirming that talks were taking place over the phone and arrangements were being laid out for subsequent continuation meetings in September.  Additionally, the Trump administration said it will delay imposing the 10% tariff on some Chinese products until mid-December. Subsequently, the Dow Jones Industrial Average, DJIA, climbed 382.20 points, or 1.48%, at 26,279.91 for the best performance on a single day in two months. The S&P 500 index added 43.23 points, or 1.5%, to 2,926.32. The Nasdaq Composite index climbed 152.95 points, or 1.95%, to 8,016.36.

US data 

The US Consumer Price Index was falling in line with market expectations in July at 0.3% m/m, pushing annual inflation up 0.2%pts from June to 1.8%.

Core inflation (ex food and energy) was a touch stronger than expected, also at 0.3% m/m, which saw the annual measure lift to 2.2% from 2.1% in June. While there appears to be some temporary strength in the details (airline fares, tobacco), two consecutive 0.3% m/m rises for core inflation may give some policy makers cause to believe inflation pressures are a touch stronger than previously assumed. Meanwhile, the US July NFIB Small Business Optimism index almost fully retraced last month’s dip on the back of improved expectations about the economy and business conditions. The temporary trade truce and record stock prices are said to have supported, so it will be interesting to see how August’s read holds up,"

analysts at ANZ bank wrote. 

DJIA levels

The DJIA index found support on the 200-DMA last Wednesday and yesterday's lows were unbreached with a spike to test the doji's highs (a 50% reversion of the late July swing highs to recent lows) which now brings in the start of August levels back into the picture. The 61.8% retracement level is located at 26646 which meets a key area of resistance dating back to April and May of this year.  On the downside, the 20-day and 50-day moving averages are targets in the 26600s. 

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD crashes to new 2020 lows amid ECB dovishness, coronavirus fears

EUR/USD is trading below 1.1050, at the lowest since early December. ECB President Christine Lagarde refrained from acknowledging the recent economic improvement. Fears of the spread of the coronavirus are weighing on markets.

EUR/USD News

GBP/USD pressured toward 1.31 amid risk-off mood

GBP/USD is trading around 1.31, off the highs. Coronavirus headlines are sending traders to the safety of the US dollar. Speculation about the next BOE move is rife.

GBP/USD News

Top 3 Price Prediction Bitcoin, Ethereum, XRP: Set for a dive before the next big bull market

The first initiative comes from WhatsApp. Users of Facebook’s popular instant messaging application will be able to exchange Ether among themselves and other tokens that function over the ERC20 protocol.

Read more

Gold Bears challenge 100-period SMA support on 4-hourly chart

Gold failed to capitalize on the overnight intraday bounce and started retreating from the vicinity of a one-week-old ascending trend-channel support breakpoint.

Gold News

USD/JPY drops to fresh eight-day lows near 109.50

USD/JPY extends losses and trades close to an eight-day low near 109.50 in a relatively risk-off environment, with the media headlines full of the coronavirus as it spreads internationally. Bears can look to the golden ratio around mid-108s.

USD/JPY News

Forex MAJORS

Cryptocurrencies

Signatures