Wall Street ends mixed despite optimism surrounding new tax cut

 

Major equity indexes in the U.S. started the day slightly higher but failed to make a decisive move in either direction to end the first day of the week on a mixed note.

After the tech-giant Apple announced that the proposed additional tariffs on $267 billion worth Chinese imports would hurt the company, President Trump responded via Twitter on Saturday by saying: “Apple prices may increase because of the massive Tariffs we may be imposing on China – but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now. Exciting!”

Apple shares lost over 2% during the session before closing 1.34% lower at $218.33. Meanwhile, following the initial negative reaction to the controversial ad campaign, Nike shares rebounded on Monday and gained over 2% to lift the S&P 500 Consumer Staples Index, which finished the day 0.35% higher. 

investors seem to be in a positive mood

Despite the choppy trading action, investors seem to be in a positive mood as they await the announcement of the new tax cuts later these week. “Anytime we’re talking about tax cuts and the growing economy, we’re winning,” Matt Gorman, a spokesman for the National Republican Congressional Committee, told Reuters on Monday.

At the end of the day, the Dow Jones Industrial Average was down 59.13 points, or 0.23%, at 25,857.41, the S&P 500 was up 5.51 points, or 0.19%, at 2,877.19 and the tech-heavy Nasdaq Composite closed 21.62 points, or 0.27%, higher at 7,924.16.

DJIA technical outlook via FXStreet Chief Analyst Valeria Bednarik

The DJIA finished the day a handful of points above its intraday low and at the lower end of the previous week´s range, with an increased bearish potential according to technical readings in the daily chart, as the index settled below its 20 DMA for the first time since August 16. In the mentioned chart, the Momentum indicator maintains a neutral-to-bearish stance, barely holding above its 100 level, while the RSI accelerated its decline, now at around 54, also leaning the scale toward the downside.

Shorter term, and according to the 4 hours chart, the index is bearish, as it closed below its 20 and 100 SMA, while technical indicators entered negative territory, maintaining their strong downward slopes. The immediate support is 25,814, the low set last Friday, with a break below the level probably exacerbating selling interest and resulting in another day of losses for the Dow. 

Support levels: 25,814 25,765 25,710.

Resistance levels: 25,914 25,966 26,009.  

Leave a Reply

Your email address will not be published. Required fields are marked *