Dow Jones Index Declines As Selling Pressure Mounts

Summary:
• Nvidia's recent losses triggered selling pressure in equities, and new US economic data could bring new volatility into the Dow Jones Index.

The Dow Jones Index opened trading on the back foot on Tuesday, going down by 0.2 percent in the intraday session to stand at 39,395 points. The Index has been on an ascending trajectory since mid-June and snapping of the winning streak signals a widespread decline in the market confidence around tech stocks.

Nvidia’s recent losses sent a warning signal to the rest of the stock market, as many investors rushed to lock in profits after the recent market rally. The company has lost $500 billion worth of its value in the last three trading sessions, sending a panicky signal across US equities markets. 

Microsoft closed trading at minus 0.4 percent on Monday, but was up by 0.1 percent in Tuesday’s premarket. However, MSFT could run into headwinds later in the day on news that the company has been charged by EU Antitrust with abusive bundling of its Teams platform with Microsoft Office. Apple was up by 0.8 percent in the pre-market, as it continued grabbing attention following news of a partnership with Meta to integrate the latter’s Generative AI solutions into the recently-launched Apple Intelligence.

UnitedHealth Group, the Dow Jones Index’s largest stock by weight, was up by 0.2 percent in the premarket, with Salesforce up by a similar margin. Among Tuesday’s top losers, Home Depot was in the red by 1 percent in the premarket, while Goldman Sachs was up by 0.6 percent at the time of writing.   Looking ahead, investors will look for fresh impetus from US New Home Sales figures and PCE data set for release on Thursday

Technical analysis

The momentum on the Dow Jones Index price signals that the bears are currently in control. The downside will likely continue if resistance persists at the 39,248 pivot mark. That could see the first support established at 39,180, but extended control by the sellers could break that mark and potentially send the index lower to test 39,110. On the other hand, if the buyers push the price above 39,248, they will likely take control, although the upside could face resistance at 39,350. Furthermore, extended control by the buyers could breach that barrier and invalidate the downside narrative. Also, that could build the momentum to head to 39,432.