The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to record losses for the second consecutive session, by -0.24%. The index went down by -79.75 points, settling at the end of trading at 32,653.21, after its decline in Monday's trading by -0.39%.
The Dow Jones Industrial Average ended the best October performance ever on Monday, investors turned cautious ahead of the Federal Reserve's monetary policy meeting that concludes on Wednesday, and sold stocks after recent gains in the stock market.
Stocks also lost momentum after the Labor Department said US job opportunities rose to 10.7 million in September, failing to provide any indication of a cooling in the labor market.
Good news for the economy can be seen as bad news for stocks because investors fear the data will prevent the Fed from slowing the pace of rate hikes in its attempt to control inflation, a process Fed Chairman Jerome Powell said would require a period of sub-trend growth.
In other data, the Institute for Supply Management said its manufacturing index fell 0.7 percentage points to 50.2 in October. Economists polled by the Wall Street Journal had expected the index to fall to 50, a figure below 50% that reflects the economy's contraction. The reading was the lowest since May of 2020.
The Commerce Department reported that construction project expenditures rose 0.2% in September to $1.81 trillion. Wall Street had expected a decline of 0.6%. The Fed is expected to raise interest rates by 75 basis points to a range of 3.75% to 4% when it concludes its two-day meeting later Wednesday. Investors will be watching closely the statement and Fed Chair Jerome Powell's press conference to look for any indications. It indicates that the central bank is taking a more pessimistic attitude in the future.
Dow Jones Technical Analysis
- Technically, the index’s decline comes after a period of successive rises, to reap its profits and to try to gain positive momentum that may help it rise again.
- At the same time, it is trying to drain some of its clear buying saturation with the relative strength indicators, especially with the start of negative signals from them.
- This comes amid being affected by a technical structure Positive formed earlier in the short term, which is the double bottom pattern.
It benefits from the positive support due to its trading above its simple moving average for the previous 50 days, but the main dominant trend remains the bearish trend along a slope line in the short term.
Therefore, our expectations suggest the return of the index's cautious rise during its upcoming trading, throughout the stability of the 31,885 support, to target the important and close 33,272.00 resistance level.
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