Dow Plunges Nearly 300 Points Amid Hawkish Statements from Fed

Wall Street edged sharply lower on Tuesday, weighed by a sell-off in global equities and a sharp decline in commodities. The DJIA traded almost 300 points lower intraday, although bounced before the closing bell, ending the day down 179 points or 1.09% a 16,330.47. The Nasdaq and the S&P also  closed in the red.

The confusing message from the US Federal Reserve, that kept rates unchanged last week, followed by ultra hawkish comments from different officials this week, vowing for a rate hike as soon as October, have pushed investors into profit taking.

Technically, the daily chart shows that the index closed at its lowest in two weeks, and below the 50% retracement of its latest weekly decline, also below its 20 SMA. In the same chart, the technical indicators have turned lower with the Momentum still above its 100 level, but the RSI heading south around 44, anticipating a downward continuation.

In the shorter term, the 4 hours chart, the index is below a bearish 20 SMA, although the technical indicators are correcting higher below their mid-lines, limiting the downside as long as the immediate support at 16,214 holds.

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