Early Wednesday saw the Dow Jones futures, S&P 500, and Nasdaq futures fall as Treasury rates rose significantly. Then, as a senior Federal Reserve policymaker called for a “rapid reduction” in the Fed’s massive balance sheet, Treasury rates spiked, and stock markets’ surge stopped.
The Dow Jones today futures fell 0.6% against fair value. A 0.9 percent drop in S&P 500 and 1.4 percent drop in Nasdaq 100 ended the day.
The Dow Jones will likely fall below its 21-day moving mean and challenge its 50-day line shortly. The Nasdaq could return to its 21-day line, while the S&P 500 might test its 200-day and 21-day lines.
The 10-year Treasury yields jumped to new highs. At 2.63 percent, they’ve gained seven basis points. Crude oil prices in the United States rose by more than 1%.
The stock market’s Tuesday surge was cut short by a close at the session lows. The DJI dropped 0.8 percent during Tuesday’s stock exchange activity. S&P reported a 1.3 percent decline in the S&P 500 Index. The Nasdaq composite dropped by 2.3 percent on Tuesday. Russell 2000, which is a small-cap index, was also down 2.3%
The crude oil prices in the United States started higher but then dropped 1.3 percent to $101.96 a barrel. Natural gas futures prices have risen by approximately 6%. The EU limits Russian coal imports, but not Russian crude oil or natural gas.
The 10-year Treasury yield rose 14 basis points to 2.56 % due to Brainard’s hawkish comments on the nation’s financial situation. Although the two-year yield increased by seven basis points, it did not rise to 2.5 percent. However, this does not mean that the yield curve has changed.
Apple’s stock fell 1.9 percent to 175.06, below its $ 176.75 double bottom purchase target. Apple Inc. (AAPL) stock now has a daily chart handle of $179.71. That makes it an excellent long-term investment. Apple did have a weekly chart handle after last week’s event, but it was fragile. Market watchers might want to pay attention to the daily carved handle.
MSFT’s share prices fell by 1.3 percent to 309.88, their lowest level since September. MSFT now has a handle at the cost of 316.05. There is some resistance at the top because the handle’s middle point is slightly higher than the base’s.
Google stock is at $2,811.82, a 1.7% decrease from its previous close. According to the daily chart, the supply of Google could be purchased at $2,875.95 per share. Like Apple, Google also had a handle for the same item on their weekly charts, but Google’s was slightly larger. Although the RS line for Google stock has not yet reached its highest point, it has been trending sideways since July.
SolarEdge stock rose as high as 344.61 but reversed and closed at 328.69. That is a loss of 2%. MarketSmith reports that SEDG shares crossed the 335.67 cup with-handle threshold intraday. The stock price of the solar power company fluctuates significantly daily. If SEDG can regain support at its 21 days moving average, the stock may be beast for several months.
As a result, semiconductor stocks suffer from a decrease in demand for PCs and other consumer electrical products. However, increasing Treasury rates are putting a strain on software. It is remarkable and alarming that Tesla has a P-E ratio in the triple digits.
That is good news for the energy and commodity sector, whether coal, oil, gas, solar companies, or uranium ETFs. All sectors are doing well. But, as the URNM and SEDG stocks showed on Tuesday, they can be subject to large intraday swings and reversals from their highs.
Medical equities with a low-to-moderate PE ratio are doing well. These companies include UNH health insurance and LLY pharmaceutical companies. Shockwave Medical (SWAV), and Edwards Lifesciences (EW), are on the right side. Despite its long history, it has been many months since AbbVie (ABBV) last moved.
AIG (AIG), and other insurance companies, are hovering around their purchase marks. But insurers aren’t concerned in a climate of rising interest rates.