US Stocks Dip Amidst Uncertainty, Eyes Turn to Key Economic Events

On Monday, U.S. stock index futures experienced a decline in evening trading, mirroring the trend on Wall Street, where uncertainties surrounding U.S. interest rates led traders to retreat from recent record highs. The hesitation in the market was evident as all three major U.S. indexes struggled for gains throughout the session, losing momentum in the final hour of trading. This decline was attributed to losses in the Consumer Goods, Oil & Gas, and Consumer Services sectors.

A slump in technology stocks, particularly Apple, and a decrease in expectations for an imminent rate cut contributed to the market's cautious atmosphere. Investors appeared to be exercising caution ahead of key events, including Federal Reserve Chair Jerome Powell's congressional testimony, the European Central Bank's policy decision, and the release of the Labor Department's February jobs report.

The month of February marked the fourth consecutive month of gains for the Dow, S&P 500, and Nasdaq, primarily fueled by growth prospects related to artificial intelligence (AI). However, on Monday, technology stocks, especially Apple, faced losses with a 2% drop during the session, triggered by a significant antitrust fine of $2 billion in Europe. This fine, coupled with broader profit-taking in the tech sector, affected the S&P 500, which closed slightly lower at 5,130.95 points, along with the Nasdaq, which fell 0.4%, and the Dow, which dropped 0.3%.

Despite the overall cautious market sentiment, chip stocks, notably Nvidia, contributed to intraday records for the S&P 500. The broader equity market, driven by the continued strength of Big Tech stocks, particularly those related to AI, saw the Invesco QQQ ETF rise more than 10% year-to-date. However, Apple and Tesla underperformed, with losses exceeding 9% and 24%, respectively, since the beginning of 2024.

Crypto-related stocks, including Coinbase Global, Marathon Digital, Riot Platforms, and CleanSpark, experienced notable gains as bitcoin surpassed $67,000.

Investors awaited insights into the U.S. economy's health through key monthly data releases, including readings on the service sector and non-farm payrolls data for February. The week ahead held significant events, including Federal Reserve Chair Jerome Powell's two-day congressional testimony, where analysts expected him to maintain a hawkish stance. Despite concerns over sticky inflation and a resilient U.S. economy expressed by several Fed officials, market analysts anticipated the possibility of rate cuts by June. As a result, it could impact the broader US stock market, leading to ongoing volatility due to uncertainties surrounding potential economic data fluctuations.

Data for Technical Analysis (5H) CFD US30 DJIA

Resistance : 38980.7, 38996.0, 39020.7

Support : 38931.3, 38916.0, 38891.3               

5H Outlook

Source: Investing.com                            

Buy/Long 1 If the support at the price range 38881.3 - 38931.3 is touched, but the support at 38931.3 cannot be broken, the TP may be set around 38983.8 and the SL around 38856.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 38980.7 - 39030.7, TP may be set around 39045.0 and SL around 38906.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 38980.7 - 39030.7 is touched, but the resistance at 38980.7 cannot be broken, the TP may be set around 38919.1 and the SL around 39055.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 38881.3 - 38931.3, TP may be set around 38855.0 and SL around 39005.0, or up to the risk appetite.       

Pivot Points Mar 5, 2024 02:03AM GMT