Just In: The Dow Jones Industrial Average (DJI) Dip 1,300 PointsOverview
The Dow Jones Industrial Average, also known as the DJIA or simply the Dow, is a market index frequently used to gauge the overall performance of the U.S. stock market. Indexes like the DJIA track the prices of a group of securities.
The Consumer index saw a downtick of 1300 points representing a 5.5% dip. This was days after Donald Trump declared a new set of tariffs targeting 185 countries, including major U.S. trading allies.
Tariffs Concern
The US stocks are poised to continue their bloodbath as futures signaled more fear over President Donald Trump's tariffs. Administration officials and Trump himself signaled on Sunday that they won't back down from their aggressive decisions. Meanwhile, an inflation report is due later this week as well as bank earnings.
Wall Street remained in fear mode over President Donald Trump's tariffs on Sunday evening as futures pointed to more steep losses.
The S&P 500 futures also sank 3.9% and Nasdaq futures dived 4.9%. That follows a devastating week that saw the worst selloff since the early days of the COVID-19 pandemic.
Similarly, the 10-year Treasury yield dropped 8.5 basis points to 3.906%, and US crude oil prices fell 3.7% to $59.72 a barrel.
Countries affected by the tariff rates are:
China (34%), the European Union (20%), and Japan (24%). Fitch Ratings estimated that the effective tariff rate could hit 25% on average — the highest in more than 115 years.
In an X post on Sunday, Former Treasury Secretary Larry Summers cautioned, saying there's a very good chance of more market turbulence similar to what was seen on Thursday and Friday.
Those sessions represented the fourth largest two-day drop in the last 85 years, Summer said. The selloff wiped out about $6 trillion in market cap.
“A drop of this magnitude signals that there’s likely to be trouble ahead, and people ought to be very cautious,” Summers wrote.
Meanwhile, Trump administration and the president himself defended the tariffs.
Technical Outlook
as of the time of writing, the The Dow Jones Industrial Average (DJI) Dip index point is down 5.5% trading in tandem with the support point that aligns with the 38,000 points. On a bearish case scenario, a break below this axis could be canning for the stock market as it will lead to panic selling in the industries concerned.
Similarly, should the bulls manage to thrust the DJI points up to the 42,000 points, we should experience a respite from the bears and possibly increased momentum might sent the stocks soaring higher. With the RSI at 23, this is hinting to a weak momentum with more downside ahead.
Downjonesindustrialaverage
Get Ready for the partyUSA market was under pressure due to so many reasons as we know but technically now the chart is looking bullish to me. Once we see a closing above 34440 its very likely it will retest the strong resistance area that is at 34900 zone.
34000 was resistance we saw rejections on 17th october 2023, now with this current really we can finally see a break through and is has retested the zone successfully. I think we are going north from here fasten your seat belts for this journey.
Hit like & follow guys ;)
Dow Jones Technical Analysis ahead of FOMCThe US headline CPI data released last week surprised the market with a smaller drop than expected. As such, a higher chance is being given to a 75-basis-points rate hike in the upcoming September FOMC meeting. The US stock market reacted with a major sell-off last week, signalling that the summer rally has overstayed its welcome.
The Dow Jones plunged by 1,300 points or 4.2% last week. The S&P500 dropped by 5.2%, while the NASDAQ declined by 6.0%.
The interest rate decision from the Fed due this Wednesday (UTC -4) will be a significant event for US markets this week. The market is currently pricing in an 85% chance of a 75bps rate hike and a 15% chance of a 100bps hike.
Looking at the current price action for the Dow Jones in combination with the Schaff Trend Cycle indicator, indicates that the downside's strength still present and may continue to stick around. The Schaff Trend Cycle is currently sitting far below the 25 level at 7.6.
However, this indicator’s current condition may also be a sign that the Dow Jones may be oversold. In such a case, we might expect the index to perform a reversal and retest the 31,200 level, before continuing the downtrend. Traders looking for a counter-trend trade might want to watch and wait for the Schaff Trend Cycle to close above the 25 levels.
With the upcoming FOMC meeting and the expectation of a 75bps or greater rate hike, we may expect a reaction to the downside during the day and a hitting of the 30,000-support area. Breaking below the 30,000-demand zone will open up the 29,500 to 29,000 targets.
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