As investors anticipate inflation data and debt ceiling progress, stocks decline.
As investors awaited important inflation statistics due later this week and developments regarding the US debt ceiling, stocks were under pressure on Tuesday, with regional bank shares declining.
The Dow Jones Industrial Average fell 25 points.
Speaker of the House Kevin McCarthy and President Joe Biden are scheduled to meet on Tuesday at 4 p.m. Both parties have stated that the meeting is merely an opportunity for talk and that making significant progress towards increasing the debt ceiling is doubtful. McCarthy and Biden continue to disagree over the House Speaker’s requirement that any agreement to raise the debt ceiling be contingent on expenditure reductions. The debt ceiling cannot be raised, according to Biden.
The failure to increase the debt ceiling would be a “economic catastrophe,” according to Treasury Secretary Janet Yellen, and regulators are not close to adopting any regulations that would restrict shorting regional bank stocks, she said on CNBC on Monday afternoon.
According to Ed Moya, senior market analyst at Oanda, “Wall Street is hesitant to take on any major positions until we find out the outcome to both debt ceiling talks at the White House and on whether or not inflation is proving to be very sticky.” There is no doubt that bank stress will persist as lending standards tighten and reserve requirements increase, which will result in fewer loans and a weaker economy.
For the most recent information on the course of inflation, traders are also anticipating the release of the producer price index on Thursday and the consumer price index report for April on Wednesday.
DOW JONES TECHNICAL ANALYSIS DAILY CHART:
- Dow Jones is currently trading in down channel.
- Dow Jones is currently trading above 5&20 SMA.
- RSI is in buying zone which suggests bullishness and Stochastic is suggesting up trend.
- Immediate resistance is at 33611.34 & its immediate support level is 33567.18
HOW TO TRADE DOW JONES IN THIS WEEK
- The Dow Jones is currently in a short-term downtrend and is trying to retrace upward if it breaks through a resistance zone. If it does, however, we can expect further gains.