US equities plunged for a third consecutive day
- Protectionism concerns coupled with renewed speculation of a faster pace of rate hikes.
- The Dow Jones accumulates a loss of 1,200 points in the last three days, decline far from over.
US indexes plunged for a third consecutive day, to end at their lowest in two weeks. Equities were hovering within modest gains and losses on the second day of Powell's testimony before the US Congress, and even managed to post some intraday gains after the new Fed's chief moderated his comments on wages' growth and inflation, cooling expectations of at least fourth rate hikes for this 2018. But near the end of his testimony, Powell said that a "gradual" pace of hikes will be four moves this year, with all hell breaking loose afterward.
January US core PCE inflation came in at 1.5% YoY for a third consecutive month, bringing some temporal to stocks' traders.
Further exacerbating the negative sentiment were news indicating that US President Trumps plans to impose tariffs on imports of steel and aluminum, triggering protectionism concerns. The Trump administration announced the president plans to order tariffs of 25% on imported steel and 10% on aluminum, as soon as next week.
The Dow Jones Industrial Average lost over 500 points intraday, to finally close the day at 24,608.98, down 420 points, the Nasdaq Composite lost 92 points or 1.27% to end at 7,180.56, while the S&P shed 36 points and closed at 2,677.67.
DJIA technical outlook
The Dow accumulates a loss of 1,200 points in these last three days, closing this Thursday below its 100 DMA. Early February, the index broke below the indicator, to finally bounce from the 200 DMA, currently around 1,100 points below the current level, too far away to be a possible target for this Friday, but surely a mid-term objective it the index remains below the 100 one, now at 24,746. Technical indicators have turned sharply lower, now entering bearish territory, supporting additional declines ahead. But is sentiment, not technicals, what skews the risk to the downside for the index these days.