• Broad-based sell-off seen in oil & commodities weigh on energy and materials.
  • CBOE Volatility Index rises 8% on trade war concerns.
  • US Stocks snap four-day winning streak on Wednesday.

Major equity indexes in the United States started the day under pressure as investors booked their profits after reports of Trump administration planning to impose a second set of tariffs on $200 billion worth of Chinese imports. The CBOE Volatility Index (VIX), Wall Street's fear gauge, rose 8% suggesting a risk-off mood in the markets.

As we have seen previously, trade fears weighed heavily on industrial manufacturer giants like Boeing and Caterpillar. Furthermore, the risk-sensitive S&P 500 Information Technology Sector lost 0.5%.

"The tone of today didn't start off well due to tariff fears," Michael Antonelli, managing director, institutional sales trading, at Robert W. Baird in Milwaukee, told Reuters on Wednesday.

Furthermore, a broad-based sell-off seen in commodities led by a 5% drop in oil prices dragged the energy and the materials indexes lower. The barrel of West Texas Intermediate settled $3.75 lower at $70.35 while copper futures fell to its lowest level in nearly a year. The S&P 500 Materials Sector (SPLRCM) and the S&P 500 Energy Sector (SPNY) lost 1.7% and 2.15% respectively.

DJIA technical outlook

In the daily chart, the decline has affected just modestly the positive tone seen on the previous updates, as the Dow closed around its 200 DMA and above the shorter ones, while technical indicators hold within positive readings, the Momentum heading higher and the RSI at around 54.

Shorter term, and according to the 4 hours chart, the index is struggling around the 20 and 200 SMA, with the shortest advancing above the larger ones, while technical indicators head south, pressuring now their mid-lines, suggesting that the current slump may continue on a break below 24,621 the daily low.

Supports for the index could be seen at 24,679, 24,621, and 24,560 while resistances align at 24,753, 24,809 and 24,860.

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 Join Telegram

Recommended content

Recommended content

Editors’ Picks

EUR/USD rebounds, steadies above 1.0400

EUR/USD rebounds, steadies above 1.0400

EUR/USD has staged a rebound and reclaimed 1.0400 during the American trading hours on Friday with the US Dollar Index retreating from the multi-week high it set at above 105.60. Nevertheless, the pair remains on track to close the week in negative territory. 


GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD reversed its direction and advanced to the 1.2050 area after having dropped to 1.1976 earlier in the day. The pair is still down more than 1% on the day with safe-haven flows dominating the financial markets following the disappointing PMI data from the US.


Gold rebounds above $1,800 as US yields fall sharply

Gold rebounds above $1,800 as US yields fall sharply

Gold has regained its traction and recovered above $1,800 after having slumped to a multi-month low below $1,790. Following the dismal PMI data from the US, the benchmark 10-year US Treasury bond yield is down more than 6% on the day, fueling XAU/USD's rebound.

Gold News

Why traders are rushing to exit positions on Cardano’s ADA price

Why traders are rushing to exit positions on Cardano’s ADA price

Cardano (ADA) price has had its performance review as the summer kicks off. ADA bulls are returning home with not-that-good a scorecard, and the underperformance could cut short holiday funding for the cryptocurrency.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!