US stocks in red on geopolitical tensions, Dow back below 21K

Major US equity indices opened lower on Monday as North Korean missile test unnerved investors and drove flows away from riskier assets - like equities. 

At the time of writing, the Dow Jones Industrial Average was down over 60-points and slipped back below 21,000 mark. Meanwhile, the broader S&P 500 Index lost around 12-points to 2,372 and tech-heavy Nasdaq Composite Index slipped nearly 35-points to 5,837.

Rising geopolitical tensions added to investors' concerns over stretched market valuations and prompted some profit taking following recent record-setting rally led by renewed optimism around the US President Donald Trump's proposed pro-growth economic policies that would accelerate growth and boost corporate profits.

Moreover, recent hawkish rhetoric from various Fed officials, including the Fed Chair Janet Yellen, which reaffirmed the optimistic view surrounding the US economy and reinforced possibilities of a rate-hike action at the next FOMC meeting on March 14-15, have also been supportive of the markets' latest leg of up-move.

A flurry of important US macro releases during the course of current trading week, especially the keenly watched NFP data on Friday, would now turn to be the next fundamental trigger for the markets' next leg of directional move, given current high valuations against the back drop of no details over Trump's economic policies. 

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com notes "Slight bearish stochastics....and we have not been able to break 2400....shouldn't.....so...we only want to be long above 2405...Don’t get carried away the first time it breaks...wait....take your time....buy it on the 2nd break...that way stops will be out of the way and it could actually be a true move higher..."