Wall Street rebounds strongly led by industrials and technology


  • Market sentiment improves amid easing trade war fears.
  • CBOE Volatility Index drops more than 5%.
  • DJIA touches highest level since early February.

Major equity indexes started the day on a positive note after China announced that the retaliatory tariffs would be imposed on $60 billion worth of American goods and eased concerns over the U.S. introducing additional tariffs. The CBOE Volatility Index, Wall Street's fear gauge, closed the day 5% higher to confirm the improved market sentiment.

The trade-sensitive S&P 500 Industrials Index closed the day 0.9% behind the S&P 500 Consumer Discretionary Index, which added 1.27% on the back of a more than 2% gain witnessed in Nike shares. "The trade dispute has escalated to a point where finally we're probably getting closer to a resolution. It's almost as if we're getting down to the brass tacks of both countries having not too much more room to go," Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana, told Reuters.

Meanwhile, boosted by a sharp rally seen in crude oil prices, the S&P 500 Energy Index rose 0.7%. Commenting on the latest developments surrounding the trade dispute, FXStreet Senior Analyst Joseph Trevisani said:

China and the United States are behaving in their trade dispute like diffident teenagers at a high school dance, trying to figure out a way to end up on the dance floor without either making the first move. But that they will dance is inevitable, the attraction is too strong.

On the other hand, dragged by reports of the U.S. Department of Justice starting an investigation on Elon Musk's public comments about taking the company private, Tesla lost nearly 4%.

After advancing to its highest level since early February at 26,317 points, the Dow Jones Industrial Average finished the day 186.36 points, or 0.72%, higher at 26,248.48 points. The S&P 500 added 16.01 points, or 0.55%, to 2,904.81 and the Nasdaq Composite gained 61.72 points, or 0.78%, to 7,957.51.

DJIA technical outlook via FXStreet Chief Analyst Valeria Bednarik

The daily chart for the Dow shows that it briefly pierced a bullish 20 DMA but recovered from around it, while technical indicators are gaining upward traction, the Momentum still within neutral levels, and the RSI currently at 64, leaving room for additional gains during the upcoming sessions.

Shorter term, and according to the 4 hours chart, the risk is also skewed to the upside, as the index advanced firmly above all of its moving averages which head north in the right order. In this last time frame, technical indicators lost upward strength after entering positive territory as the index retreated from its intraday high of 26,315, but the Momentum turned flat and the RSI stands at 63, far both from suggesting upward exhaustion or an upcoming decline. 

Support levels: 26,220 - 26,161 - 26,110.

Resistance levels: 26,277 - 26,315 - 26,368. 

 

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD climbs above 1.1250 as investors eye coronavirus headlines

EUR/USD preserved its recovery momentum early Friday and rose above 1.1250 during the European trading hours. Markets are doubting the Fed's policy tightening prospects as the new coronavirus variant revives concerns over the economic recovery losing steam.

EUR/USD News

GBP/USD rebounds toward mid-1.3300s on broad dollar weakness

GBP/USD reversed its direction after dipping below 1.3300 earlier in the day and started to push higher toward 1.3350. The greenback is facing heavy selling pressure amid the sharp decline witnessed in the 10-year US Treasury bond yield.

GBP/USD News

Gold clings to strong gains above $1,800 as US T-bond yields plunge Premium

Gold staged a decisive rebound on Friday and reclaimed $1,800. The intense flight to safety is causing US Treasury bond yields to fall sharply and fueling XAU/USD's rally. Investors await news on vaccines' effectiveness against the new COVID variant.

Gold News

Cardano could tank to $1 if ADA fails to defend crucial support

Cardano price is currently hovering below a freshly shattered 6-hour demand zone, ranging from $1.68 to $1.79. This resulting crash could extend to the immediate and critical foothold at $1.40. 

Read more

Black Friday 2021 Discounts!

Do you want to take your trading skills to the next level? Now you have a chance of leaping forward at attractive introductory rates. For Black Friday, FXStreet is offering discounts of up to 50% on its upgraded Premium plans. 

Subscribe now!

Forex MAJORS

Cryptocurrencies

Signatures