Wall Street Faces Volatility Amidst Rising Treasury Yields and Geopolitical Tensions

Wall Street experienced a day of fluctuating fortunes on Tuesday, ultimately ending on a downward trend as Treasury yields rose. Investors grappled with the trajectory of interest rates in the U.S., considering the backdrop of a robust economy juxtaposed with persistent inflation concerns.

Following this, actual trading saw a mixed performance among different sectors. Technology, Healthcare, and Consumer Services sectors saw gains, whereas Utilities, Oil & Gas, and Financials sectors faced losses.

Despite a recent string of losses, Wall Street appeared to stabilize, although risk appetite remained fragile amid ongoing geopolitical tensions in the Middle East and consistent reaffirmations of steady interest rates by top Federal Reserve officials.

Federal Reserve Chair Jerome Powell's remarks underscored the cautious stance on easing credit, citing insufficient confidence stemming from recent inflation data. Powell hinted at the possibility of prolonged higher rates, diverging from previous expectations. Meanwhile, the Middle East crisis intensified with Iran's attack on Israel, adding to market jitters.

Amidst this backdrop, Morgan Stanley saw a rise in its stock following a strong first-quarter profit, whereas Bank of America faced a decline due to lower profits and increased loan loss provisions.

UnitedHealth Group's better-than-anticipated quarterly results provided a lift to the Dow Jones Industrial Average, while Real Estate and Utilities sectors weighed down the S&P 500. Technology stocks notably contributed positively to the market.

Johnson & Johnson's stock slipped due to disappointing revenue, particularly from its psoriasis drug Stelara. Tesla's shares fell further after announcing layoffs and facing delays in cybertruck deliveries, contributing to concerns about its future demand.

Live Nation Entertainment Inc faced a significant drop after reports emerged of an impending antitrust lawsuit by the U.S. Department of Justice, alleging market dominance abuse in the live events sector.

Tech giants like Microsoft and NVIDIA saw some gains, with Microsoft's investment in an Abu Dhabi AI firm sparking positive market sentiment.

Looking ahead, the earnings season continued with ASML Holding NV and Abbott Laboratories slated to report on Wednesday. Overall, market sentiment remained cautious amid a complex interplay of economic data, geopolitical tensions, and corporate performance. Consequently, it could impact the broader U.S. stock market, even though there might be a slight upward trend during this period. However, there remains considerable volatility and uncertainty, posing risks to investors.

Data for Technical Analysis (1H) CFD US30 DJIA

Resistance : 37894.1, 37901.2, 37912.8

Support : 37870.9, 37863.8, 37852.2                              

1H Outlook

Source: TradingView             

Buy/Long 1 If the support at the price range 37840.9 - 37870.9 is touched, but the support at 37870.9 cannot be broken, the TP may be set around 37899.1 and the SL around 37825.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 37894.1 - 37924.1, TP may be set around 39540.0 and SL around 37855.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 37894.1 - 37924.1 is touched, but the resistance at 37894.1 cannot be broken, the TP may be set around 37868.8 and the SL around 37939.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 37840.9 - 37870.9, TP may be set around 37825.0 and SL around 37909.0, or up to the risk appetite.       

Pivot Points Apr 17, 2024 03:25AM GMT