S&P 500 is trading down 0.39% at 3717.99
U.S. stocks are seen opening sharply lower Wednesday, handing back some of the previous session’s gains ahead of the start of the two-day testimony by Fed Chair Jerome Powell on Capitol Hill.
At 07:00 a.m. ET (1100 GMT), the Dow Futures contract was down 350 points, or 1.1%, S&P 500 Futures traded 50 points, or 1.4% lower and Nasdaq 100 Futures dropped 195 points, or 1.7%.
The major indices on Wall Street posted strong gains on Tuesday, attempting to claw back some of the hefty losses of the past few weeks. The blue-chip Dow Jones Industrial Average rose over 600 points, or 2.2%, the broad-based S&P 500 climbed 2.5%, its best day since early May, while the tech-heavy Nasdaq Composite also gained 2.5%.
However, such a positive day has become unusual, with investors worried about a potential recession ahead as the Federal Reserve aggressively tightens monetary policy to combat inflation running at levels not seen for 40 years.
The probability of the world economy succumbing to a recession is nearing 50% as central banks tighten monetary policy, according to Citigroup.
“Central banks may yet engineer the soft — or “softish” — landings embodied in their forecasts (and in ours), but this will require supply shocks to ebb and demand to remain resilient,” the bank’s economists said in a note Wednesday.
Investors will study carefully Fed Chair Jerome Powell’s testimony about the state of the economy in the Senate, beginning at 09:30 a.m. ET (1330 GMT), for clues about future monetary policy as he’s sure to be questioned about the current levels of inflation and last week’s decision to raise rates by 75 basis points.
On technical fronts S&P 500 RSI stood at 20.51 and currently it is trading below all MA. So, SELL position can be taken with following target and stoploss:
TRADE SIGNAL – : S&P 500 – SELL: 3716.99, TARGET: 3662.11, STOP LOSS: 3780.61
