Dow Jones futures are down by almost 80 points as traders worry about the rising number of coronavirus cases in the United States. The S&P 500, on the other hand, is down by 4 points while the Nasdaq 100 is up by 40 points. What is moving the Dow Jones today?
Rising coronavirus cases in the US
The Dow Jones is probably falling because of the rising number of coronavirus cases in the United States. Yesterday, health officials in the country confirmed more than 62,750 new infections, bypassing the record made on Friday. In total, the number of deaths has increased to almost 130,000. California and Texas reported more than 9,000 and 11,000 new cases respectively.
The cases are spiking at a time when debate is raging about whether to open schools in fall. Donald Trump has been putting pressure on governors to allow sessions to resume. That is against what the government’s own advisors have been warning. Meanwhile, congress is urging government agencies to pause on ordering employees to go back to work.
Meanwhile, travel between Europe and the United States is continuing. The ban started early this year when the Trump administration barred people from Europe. At the time, the number of infections in Europe was accelerating rapidly. Now, with Europe containing the disease, the bloc has initiated its ban, This has impact for the Dow Jones because of the volume of trade that constituent companies do there.
China extends olive branch to the US
The Dow Jones is also reacting to an olive branch extended to the United States by the Chinese. In a statement, the country’s foreign minister, Wang Yi, said that the country’s main policy towards the US is still unchanged. He said:
“Some friends in the US might have become suspicious or even wary of a growing China. I’d like to stress here again that China never intends to challenge or replace the US, or have full confrontation with the US. What we care most about is to improve the livelihood of our people.”
He said the statement at a time when the two countries are having serious issues. For example, there are concerns about whether China has increased its purchases of US goods. Trump has also blamed the country for its response to the virus.
Dow Jones technical outlook
The Dow Jones has been consolidating in the past few days. The price has found some resistance at the $26,000 level. It is also above the 50-day and 100-day exponential moving average and is also between the 61.8% and 78.6% Fibonacci retracement. The price is also above the ascending black trend line. Therefore, I expect the Dow Jones to continue rising as bulls attempt to move past the important resistance at $26,357.
On the flip side, a move below $25,300 will invalidate this trend. This price is along the 50-day and 100-day EMAs and also along the 61.8% retracement level.
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Dow Jones futures forecast
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