Stock Indices Fall, U.S./China Tensions Dominate Sentiment
Going into the June trading month, it looks like a summertime run at the U.S. indices' February all-time highs isn’t out of the question.
It has been an active morning on Wall Street, with the U.S. indices coming off weekly highs. At the midway point of the American session, the DJIA DOW (-295), S&P 500 SPX (-25), NASDAQ (-20) are in the red. Thus far, the bearish sentiment is being attributed to increasing tensions between the United States and China.
For a Friday, it’s been a busy schedule. Comments from FED Chairman Jerome Powell and a Trump presser are headlining the action. Here’s what you need to know ahead of the weekly closing bell:
- Powell: Earlier today, Jerome Powell issued comments via webcast sponsored by Princeton University. The key quote was that Powell is “still concerned about a second wave of the coronavirus pandemic.” In addition, Powell said that a second wave “would be challenging” for the FED to manage.
- Trump: President Donald Trump has scheduled a press conference for 2:00 PM EST. In it, Trump is expected to address U.S./Sino relations, specifically the issue of Hong Kong. This presser has the potential to drive market volatility to risk assets and safe-havens alike.
Over the past three months, a lot has changed, but much has stayed the same. COVID-19 fallout remains a major concern and U.S./China relations are in tatters. Be on the lookout for any news that may compromise the Phase 1 trade deal. If U.S./China Phase 1 is scrapped, a short-term correction in the U.S. indices is a foregone conclusion.
U.S. Indices Pull Back To Wrap Up Weekly Trade
June E-mini DOW futures have put in a robust 10-week rally from March’s lows. Going into the June trading month, it looks like a summertime run at the DOW’s February all-time highs isn’t out of the question.
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Here are the key levels to watch as we roll into June:
- Resistance(1): Weekly SMA, 26,150
- Support(1): 62% COVID-19 Retracement, 25,144
Overview: Right now, the key number in the DJIA and June E-mini Dow is 25,000. This is a major psychological level and it is currently acting as support. As long as values are above 25,000, a topside bias toward the DOW and other U.S. indices is warranted.
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