(MENAFN– Daily Forex) The dow jones industrial average slid down during its last trading on intraday levels, to incur sharp losses by -1.72%, to lose about -574.98 points, which represents most of the gains of the last four sessions, to settle at the end of trading at the level of 32,856.47, after rising during trading on Monday increased by 0.12%.
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Tight comments from Federal Reserve Chairman Jerome Powell sparked a sell-off on Wall Street on Tuesday, as hopes faded further that the central bank would be able to halt rate hikes in the near future.
Powell warned that the central bank is ready to accelerate the pace of tightening as the latest data turned out to be stronger than expected, in testimony prepared before the Senate Banking Committee, and Powell acknowledged that the final level of interest rates could be higher than previously expected.
Meanwhile, the yield on the two-year US Treasury yield occupied the 5% mark, a level not seen since 2007, as those short-term yields are known for their extreme sensitivity to interest rates. This, along with a strong dollar rally, kept investors away from technology stocks and other future growth stocks.
These comments came on the heels of recent data showing an unexpected increase in inflation in January, and an unusually large gain in jobs for the month.
Traders have dramatically increased their bets on a 50 basis point rate hike in March after Powell’s comments, with a chance of over 70% for such a move, up from a 31% chance on Monday.
Powell is scheduled to repeat his congressional testimony on Wednesday, this time before the House Banking Committee. Also due on Wednesday is the February ADP National Employment, forecasts for a reading of 200K, vs. a previous print of 106K.
- Technically, the index was exposed to negative pressure, as we expected it yesterday, after touching the resistance of its simple moving average for the previous 50-day period.
- This is in light of the dominance of the main bearish trend on the medium term along a trend line, as shown in the attached chart for a period of time (daily).
- This comes despite the presence of positive signs in the relative strength indicators.
Therefore, our expectations indicate a further decline for the index during its upcoming trading, to target the pivotal and nearby support level 32,582, and then target 31,727.00.
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