US equities reverse course, tumble after strong opening

The US equity markets took a sharp U-turn, reversing all of its early strong gains and accelerating the slide further into negative territory.

At the time of writing, the Dow Jones Industrial Average was down more than 100-points, back below 20,800 mark, while the broader S&P 500 Index lost in excess of 13-points and dropped to 2,360. Meanwhile, tech-heavy Nasdaq Composite Index sunk over 1% from record highs touched during opening hour of trade and was down nearly 45-point to 5,860.

Volatile oil prices, with WTI crude oil reversing all of its early strong gains to drop back below $49.00/barrel mark, was seen weighing on energy stocks. This coupled with post-FOMC sharp slide in the US treasury bond yields collaborated to the decline in financial stocks and eventually dragging the markets lower. 

Kansas City Fed President Esther George and the Cleveland Fed’s Loretta Mester are slated to give a speech later during the day and would now be looked upon for some fresh impetus.

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com writes, “The key level on that is 20825..we lose that ...especially on a close basis and we are going quite a bit lower with 20611 then targeted...we really need to clear 20985 to make this look a little stronger and challenge the 21169 highs...The daily charts look positive from the stochastic. But weeklies negative...and the price isn't really reflecting the stochastic...so we go with the price...”