The Dow Jones fell 500 points on Monday despite a late-session rally that avoided an 800 point drop in the industrial average. The Dow was off 1.8% on the day with fears growing over another lockdown in Europe.
Record case numbers in France and further restrictions in other countries were seen but the U.K. is looking like it will enter another lockdown with Boris Johnson set to announce details this evening. The return to home working is one reason that the Nasdaq fared better than the industrial stocks with a loss of only 0.13%. If markets saw another full lockdown in some parts of the world then another hit to GDP numbers would be likely and this will add caution to stocks in the coming weeks.
Today will see new home sales numbers from the U.S. economy with a gain of 2.4% expected after last month’s bounce of 24.7%. There is also a testimony from Fed Chair Jerome Powell, and speeches from other Fed officals. The market will not be expecting anything they haven’t heard about monetary policy in the last weeks, however it could bring volatility if there are remarks about asset prices.
On the upside, first resistance for the Dow index stands at 25,601 the high from yesterday. A move above 25,601 might open the way for a test of 25,027 the high from June 24. If the bulls continue then the next supply zone for the Dow Jones is at 26,274 the 200-day moving average.
Dow Jones Technical Outlook
The Dow is also under pressure after a war of words from U.S. politicians about the vacant Supreme Court Justice seat. Trump wants to fill the seat before the election, while Democrats are seeking a delay, with even a threat of another impeachment being lodged. This political animosity will not give confidence to foreign investors and brings the risk of profit-taking ahead of the election. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.
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Dow Jones Daily Chart
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