The Dow Jones Industrial Average declined in its last trading session from its worst year since 2008, to record losses of -0.22%. It lost about -73.55 points, to settle at the end of trading at the level of 33,147.26, after rising by 1.05% during Thursday’s trading.
The index also recorded losses during last week’s trading by 0.2%, while it declined during December by -4.16%. Finally, the index fell in 2022 by 8.8%, cutting the index’s series of annual gains that lasted for three consecutive years, as it ended the era of easy monetary policy with the fastest pace of Fed rate hikes since the 1980s.
Signs of US economic resilience fueled fears that interest rates could remain high, although easing inflationary pressures raised hopes for a rate hike. Market participants see a 65% chance of a 25-basis point increase at the Fed's February meeting. Rates are expected to peak at 4.97% by mid-2023.
Investors' focus has now shifted to corporate earnings forecasts for 2023, as concerns grow about the possibility of a recession. While volume and news flow remained light on the last trading day of 2022, as investors prepare for a three-day weekend. Wall Street will return to work on Tuesday, after Monday's New Year's Day off.
Meanwhile, the Chicago Purchasing Managers' Index for December, the last major data release for the year, came in stronger than expected. Rose to 44.9 from 37.2 in the previous month, readings below 50 indicate contraction.
Dow Jones Technical Analysis
- Technically, the index's decline comes with the start of a negative intersection with the relative strength indicators, in an attempt to gain positive momentum that may help it recover and rise again.
- This happened considering the continued positive support for its trading above its simple moving average for the previous 50 days, with it being affected by the breach of a bearish corrective slope line Earlier in the short term.
- This is shown in the accompanying (daily) time chart.
Therefore, our expectations suggest that the index will rise again during its upcoming trading, as long as the 32,582.00 support remains stable, to target the first resistance levels at 34,281.36.
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