Wall Street's wings clipped on Fed rate-cut-enthusiasm dampener

U.S. stocks ended lower after remarks by Federal Reserve officials that dampen the rate-cut enthusiasm spurred up at the last meeting, leaving expectations on the tale of a 50 basis point rate cut for July. Subsequently, the Dow Jones Industrial Average, DJIA, lost 0.7%, to 26,548, while the S&P 500 index lost  1% at 2,917, with the info tech sector losing 1.5% in the Nasdaq Composite. St. Louis Fed President James Bullard, a dovish FOMC member who had advocated for a rate cut, said he didn't endorse an aggressive cut. Then, Fed Chairman Jerome Powell said the rate-setting Federal Open Market Committee was "grappling with is whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation," in prepared remarks. He also stated that the amount of tariffs currently in place are not large enough to [directly] have an economic impact, but the uncertainty they bring is impacting the confidence of financial and agricultural markets.

Consumer Confidence reading falls sharply

As for U.S data, the Consumer Confidence reading fell sharply in June following a downward revision of May data as trade tensions take their toll. "The index which measures the current situation fell to its lowest level in 12 months, while the forward looking index was at its lowest level since January. New home sales data for May was also disappointing with lower interest rates having no impact. Home sales fell 7.8% in May following a 3.7% fall in April," analysts at ANZ bank explained. 

DJIA levels

The DJIA pulled back to the pivot at 26550 on the 4HR and 1HR chart, testing the 20 June low and backing away from the 3rd Oct 2018 highs, putting the 26951 Oct 2018 highs and the 27000 psychological level back over the horizon, for now. Below 26500, the prior sideways consolidating above the 61.8% Fibo retracement level of April to June swing highs and lows guard 25984 and then a 50% mean reversion of the current range to the 257940s.