Stock futures are under bearish pressure as rate-hike fear resurfaces

The rally in the stock market will take a pause as traders weigh on the next month’s interest rate hike and a possible increase in the inflation rate again. We might see the market playing the bearish scenario before the Fed announcement and start a new bullish leg after the news release. Under the current situation, traders could follow the bearish scenario and do the opposite strategy after the news release.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index has reached the daily SMA 200 and also printed a new higher high. However, this will become the real test for the index’s bullish trend. If the index continues moving lower and closes below 32,500 then we might see a more bearish leg to target a new lower low. On the other hand, another bullish close above the daily SMA 200 might indicate a new bullish leg.

Lowe’s Companies (LOW)

LOW share prices mirror the DJIA index movement. At the current time, the share prices are trading near the daily SMA 200. If the DJIA index moves lower then we might see the same movement in LOW share prices. Traders could consider entering short positions near the current level.