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Stocks extended gains on Friday after the Institute for Supply Management said its services index held steady at 55.1% in February, showing that the US economy remains in expansion mode even as headwinds rebound.
- The Dow Jones Industrial Average continued to rise during its recent trading on intraday levels, achieving gains for the third day in a row, by 1.17%.
- The index added to it about 387.40 points, and settled at the end of trading at the level of 33,390.98, to record consecutive daily gains of 1% for the first time.
- Since last November, after the index rose during trading on Thursday by 1.05%, during the past week the index achieved an increase of 1.7%, stopping a series of losses that lasted for four weeks.
Stocks fell in February as a string of hotter-than-expected jobs and inflation data led investors to re-evaluate expectations about how far the Federal Reserve would push interest rates higher in an effort to control stubborn inflation. Investors worried that the reserve’s monetary policy The Fed may need to be more hawkish for longer to tame stable inflation, which has lifted bond yields.
Stocks extended gains on Friday after the Institute for Supply Management said its services index held steady at 55.1% in February, showing that the US economy remains in expansion mode even as headwinds rebound.
US stocks rose this week, with a measure of market volatility CBOE down more than 14%, settling at 18.5 on Friday.
Now traders will closely scrutinize Federal Reserve Chairman Jerome Powell’s congressional testimony later in the week, recent signs that inflation may be more stable than thought have driven markets higher this year. At the end of the week, the economic data will wrap up.
Technically, the recent rise in the index came as a result of the stability of the pivotal support level 32,582, which gave it some positive momentum, to help it clear some of its clear oversold levels with the relative strength indicators, especially with positive signs coming from them.
However, this comes in light of its trading along a major bearish trend line in the medium term, as shown in the attached chart for a (daily) period of time, with continued negative pressure for its trading below the simple moving average for the previous 50-day period.
Therefore, our expectations still suggest that the index will return to decline during its upcoming trading, as long as the resistance at 34,281.36 remains stable, to target once again the support level at 32,582, in preparation for breaking it.
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