- The Dow Jones Industrial Average fell 112.31 points, or 0.35%, at the open to 31,816.31.
- After three sessions, there was a good chance that the Dow Jones Industrial Average would end its winning streak.
- The Dow Jones Industrial Average recovered from its day lows in the closing hours.
NEW YORK, May 25 (FintechZoom): The US stock market fell Wednesday as investors awaited Federal Reserve meeting minutes for further insight into its thinking about economic growth and inflation.
For the third consecutive day, the Dow Jones Industrial Average (INDEXDJX: .DJI) rose during recent intraday trading to gain 1.98%, about 48.38 points. Following a rise of 1.98% in the previous session, the trading session ended at 31,928.63.
After Tuesday’s sell-off prompted by Snap’s macroeconomic warning and shortfall of profit, the S&P 500 and Nasdaq Composite were looking at their second straight losses. The Dow Jones Industrial Average was set to end three consecutive days of gains.
The stock market has been falling due to signs of a slowing economy, and investors are concerned that the Fed is going too fast in raising interest rates as it combats inflation.
As investors gained confidence in the perceived safety of government bonds, US bond yields fell Wednesday. The Federal Reserve System will release its minutes for its latest meeting. Eastern.
A total of 18 of the 30 components of the index rose during the session, with each stock increasing by a certain percentage. McDonald’s Corp. rose by 2.74%, followed by Verizon Communications Inc. by 2.03%, then International Business Machines Corp. rose by 2.01%.
Tomorrow marks the 100th trading day of 2022, a year that will be remembered as one of the most turbulent since the dot-com crash when long-dominant tech stocks collapsed dramatically.
Analysts attribute the Dow’s downturn to inflation that reduces future profits today due to rising costs driving down the present value of stocks.
On Wednesday, a slight rise in stock futures signals a positive start on Wall Street as investors wait to see what the Federal Reserve’s meeting minutes reveal about the central bank’s plans to tighten monetary policy.
On May 4, the Federal Reserve raised interest rates by half a percentage point, a first in 22 years. The Fed announced that it would begin shrinking its balance sheet next month. Chairman Powell also hinted that a 0.5% rate hike could be expected at the next Federal Reserve meeting in June, and Wall Street is expecting another 0.5% hike in July.
Dow Jones technical analysis:
In technical terms, the index’s rise can be attributed to the relative strength indicators showing positive signals. Due to its need to eliminate this oversold activity, the index reached earlier areas of oversold activity, which gave it some positive momentum. The company is also seeking compensation for part of what it lost in the past. Despite its trading within a bearish corrective price channel that limited its short-term trading, it continued to trade below the 50-day simple moving average, adding to the negative pressure from its previous trading. Having recently retested the main resistance level of 32,000, the index is close to its recent peak.
Thus, we remain optimistic that the index will return to the downside during its upcoming trading, especially if the 32,000 resistance level remains stable to target the 30,547.50 support level.
