. Dow Futures Decline as Debt Ceiling Stand-Off Continues

Dow Futures Decline as Debt Ceiling Stand-Off Continues

16 May 2023

Prior to the debt ceiling negotiations, the Dow futures decline by 95 points.

Investors are anticipating the resumption of talks at the White House to try to resolve the debt ceiling stand-off, thus it is expected that U.S. markets will open cautiously on Tuesday.

The Dow Futures contract was down 95 points.

Equity markets have been affected by worries about the country’s inability to raise its debt ceiling, so there will be a lot of focus on the meeting between President Joe Biden and House Speaker Kevin McCarthy later today as the estimated June deadline for raising the $31.4 trillion borrowing limit approaches.

Though Biden voiced optimism for a compromise over the weekend, the two sides are still at odds on spending measures. This would prevent the possibility of the federal government defaulting on its debts, a situation that might have significant worldwide repercussions.

A Bank of America survey released on Tuesday revealed that despite these worries, investors have increased their equity allocations to a 5-month high, with their allocations to tech equities reaching their highest level since December 2021.

Investors will also be watching the retail sales figures for April, which are scheduled to increase by 0.8% from the previous month and 4.2% from the same month a year ago and are due at 08:30 ET (12:30 GMT).

The Federal Reserve is likely to stop its cycle of interest rate increases while it evaluates the effects of its policy decisions in response to signs of an economic slowdown, and this kind of data will be carefully examined.

Tuesday saw a downward shift in the stock market. In response to Home Depot’s unimpressive prediction, investors reacted. Additionally, they moved their attention to a crucial meeting between President Joe Biden and legislative leaders about the US debt ceiling.

DOW JONES TECHNICAL ANALYSIS DAILY CHART:

Dow Jones is currently trading in the down channel.

Dow Jones is currently trading below all SMA.

RSI is in buying zone which suggests bullishness and Stochastic is suggesting a downtrend.

Immediate resistance is at 33337.55 & its immediate support level is 33174.94

HOW TO TRADE DOW JONES IN THIS WEEK

Dow Jones is currently trading in a downward channel. Dow Jones attempted to advance higher but reversed precisely at the same previous resistance level. Now it has created a double-top pattern, and the price is at a crucial support level that, if broken, might cause a further decline to the downside.

TRADE SUGGESTION- SELL AT 33174.94, TARGET AT 32992.81, SL AT 33337.55