Wall Street loses on political uncertainty

  • US inflation figures kept the Fed in the tightening path with spooking equities' bulls.
  • Trump, on the other hand, triggered fears and sent stocks lower.

Wall Street tried to shrug off the negative tone from Monday, but failed miserably amid political turmoil in Washington, with the three major indexes closing in the red. The Dow Jones Industrial Average lost 171 points, roughly 350 since the week started, and closed at 25,007.03. The S&P lost 0.64% or 17 points to settle at 2,765.31, while the Nasdaq was unable to extend its winning streak and lost 1.02% to close at 7,511.01.

Uncertainty was behind the daily slump, as US inflation came in as expected in February, enough to keep the Fed in the tightening path but falling short of spooking equities' bulls. Nevertheless, the decision of US President Trump of firing Secretary of State Rex Tillerson and the following nomination Mike Pompeo, the current director of the CIA as his replacement, sent investors into risk-off mode.

The Dow is down for a second consecutive day, but still holding above Friday's opening level. In the daily chart, the downward potential increased, as the index finished a few points below its 20 DMA, while technical indicators entered bearish territory with solid downward slopes, although it still faces a major support around 24,900, the 100 DMA.

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