Dow futures drop 175 points, putting the focus on the core PCE index
U.S. stocks are seen opening lower Friday, ending the week on a fragile note ahead of the release of widely anticipated inflation data which could trigger further interest rate increases.
The Dow futures contract was down 175 points.
The major indices closed higher on Thursday but are heading towards a losing week as investors fret that elevated inflation will force the U.S. Federal Reserve to continue raising interest rates, likely weighing on future economic activity.
The blue-chip Dow Jones Industrial Average is down 2% this week, on course for its fourth straight losing week.
Global equity funds lost $7 billion in outflows in the week through Feb. 22, while $3.8B left cash funds, according to a note from Bank of America, citing EPFR Global data, as investors positioned for the risk that the Federal Reserve retains a hawkish bent.
The Fed is widely expected to raise rates another quarter of a percentage point when it meets in March, followed by another in May and possibly also in June, pushing the terminal rate to 5.2% or above.
The core personal consumption index, the Fed’s favorite gauge of inflation, is due later this session and could provide more ammunition for the U.S. central bank to continue pushing interest rates higher.
Data on personal income and spending as well as the University of Michigan consumer sentiment index are also due for release Friday, while comments from Fed speakers Loretta Mester, Philip Jefferson, and Susan Collins will also be studied.
In the corporate sector, Boeing (NYSE: BA) stock fell premarket after the Federal Aviation Administration said on Thursday that the platemakers have temporarily halted deliveries of its 787 Dreamliner jets as it conducts analysis on a fuselage component.
DOW JONES TECHNICAL ANALYSIS DAILY CHART:
Dow Jones is currently trading in the up channel.
Dow Jones is currently trading below all SMA.
RSI is in the selling zone which suggests bearishness and Stochastic is suggesting a downtrend.
Dow Jones’s immediate resistance is at 33185.20& its immediate support level is 32927.68
HOW TO TRADE DOW JONES IN THIS WEEK
Dow Jones is trading in the up channel, but it has reversed to the downside & currently it is at an important support zone if it breaks the support level then, we can see further to the downside.