DJIA index drops more than 400 points

The U.S. stock market undergoes a significant bearish movement today as gold prices and treasury yield continue to climb. It seems the market is reassessing the chance that the Fed will continue the interest-rate cut. Rising treasury yield could derail the Fed’s plan for an aggressive rate-cut. At the current time, the 10-year treasury yield sits at 4.25%. Meanwhile, the Fed fund rate is 5% after the previous 50 bps cut and the inflation rate was 2.4%. We are two weeks before the next FOMC meeting which is expected to see a 25 bps rate cut.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index is under bearish pressure today which marks a significant bearish correction since reached 43,000. The index might attempt to continue the bearish movement toward 42,000 where a bounce might happen. As mentioned before, traders will look for opportunities to add long positions in stocks. As long as there is no lower swing low printed then the trend will continue bullish.

McDonalds Corporation (MCD)

MCD share prices took a hit today after the CDC linked the chain of quarter-pounder burgers to an E. Coli outbreak. Share prices are down below $300.00 but show recovery toward it now. If the bearish pressure continues, traders could use the chance to enter long stock positions at a lower level. When the outbreak is under control, we can see the share prices stabilize or return to their normal level before a major bearish move happens.