Stock futures under pressure after potential recession warning

The stock market is set to trade lower today following the weak guidance from Target’s result. The company plan to mark down price to deal with the excess inventory and cancel orders. The profit margin is expected to range around 2.0% for Q2 vs. 6.5% expectation. Under the current situation, it seems retailers took a hit from the rising inflation and the company situation might reflect the coming recession.

Traders will stay cautious when entering long positions. It is better to say sideline for now at least until improvement in the inflation and recovery happen.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index consolidates inside the area shown on the daily chart and waiting for the next direction. Currently, the index futures are lower by 238 points, which indicates a bearish continuation. As the trend of the index has been bearish below the daily SMA 200, traders will continue to avoid long positions in stocks for now.

Electronic Arts Inc (EA)

EA share prices broke above the daily SMA 200 and tested the top trendline. The trend has turned bullish for the share prices. However, we might see a bearish correction that might reach the daily SMA 200. Trades could plan long positions near the averages when bounce reactions happen.