- Dow Jones Industrial Average futures YM00, 0.85% jumped 294 points, or 0.9%, to 31,495.
- US stock futures rise after China rate cut, as Dow Jones is in danger of the worst weekly drop in history.
- Technically, the pressure to sell is still very high. But unfortunately, there are no signs of a reversal yet.
The Dow Jones traded slightly higher today after the major benchmark index extended losses during the regular session. However, investors continued to retreat on fears that the Federal Reserve’s interest rate hikes to fight rapid inflation would steer the economy into a deeper recession.
During regular trading from Thursday through today, the Dow Jones Industrial Average was down 236.94 points, or 0.75%, to 31,253.13, the S&P 500 was down 22.9 points, or 0.6%, to 3,900.8, and the NASDAQ Composite was down. 0.26% to 11,388.50. This condition also contributed to dragging the existing stock market into concern, although they began to respond to buy from an insider perspective. However, this can only hold the current trend for a moment.
It’s been a tough week for the stock market. Wednesday was the worst day for the Dow Jones and the S&P 500 since mid-2020, as an estimated $1.5 trillion market value evaporated. In addition, the risk of a recession as the Federal Reserve tightens monetary policy to tame inflation continues to loom.
Investors can’t just ignore some concerns about how rising costs will affect the company’s profit margins, seeing further declines in stocks on Thursday — although no scale was seen earlier in the week. So, with stocks heading even lower, is the capitulation among investors showing the bottom of the market finally here?
But the sentiment was quite hopeful when the week’s last trading day arrived, helped in part by fresh stimulus from China’s central bank. The People’s Bank of China lowered its main lending rate for five years on Friday for the second time this year; the move from 4.45% to 4.6% was the biggest cut.
China’s decision to cut interest rates on those loans, the reference rate for mortgages, helped boost risk sentiment for this Friday. There is at least some decent follow-through, denoting that European indices and US futures are heading higher. The policy hopes that it can affect the downward conditions experienced by the Dow Jones with the opportunity for a reversal or at least a retracement.
The US economic calendar seems empty for Friday, but next week will bring a round of inflation data and personal consumption spending prices, excluding food and energy.
Dow Jones index technical analysis
According to current conditions, technically, the Dow Jones Index slightly bounces from the March 2021 support zone. But in general, there is no significant movement, still, like the movement on Thursday, which ranged in the low area. If we look at 100-SMA, the trend is still strong and bearish. Even if there is an upward impulse, it is highly likely to be stuck in the daily pivot area.
Therefore, the pressure for selling in the stock market is still very high. As a result, we can observe taking a short in the daily pivot area or in the fresh supply zone area.