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  • The Dow Jones Industrial Average (DJIA), dropped 122.35 points, or 0.5%, to 26,307.79.
  • The S&P 500 dropped 6.21 points, or 0.2%, to close at 2,917.52.
  • The Nasdaq Composite Index shed 12.87 points, or 0.2%, to 8,036.77.

The Dow Jones Industrial Average (DJIA), dropped 122.35 points, or 0.5%, to 26,307.79, and scored an intraday low at 26,180.36 as traders digested a hawkish tone from Powell which made for the worst session for Wall Street in a month. The S&P 500 dropped 6.21 points, or 0.2%, to close at 2,917.52 while the Nasdaq Composite Index shed 12.87 points, or 0.2%, to 8,036.77.

U.S. data

Analysts at ANZ Bank summed up the data as follows:

  • Strong factory numbers:  US factory order numbers for March were stronger than expected up 1.9% m/m, bouncing back from a fall in February. This is a sign of improved business sentiment.
  • Worker productivity up:  Complementing the factory data was a 3.6% lift in Q1 nonfarm productivity in the US. This is the fastest rate of growth recorded in over four years, significantly exceeding market expectations. The strong growth in productivity offset rises in labour costs.

Non-Farm Payrolls: ADP and ISM point in different directions

Markets now await the  nonfarm payrolls report for April where a particular focus will be on  wage growth considering the hawkish rhetoric from  Powell when he indicated the Fed’s belief that inflation would soon head higher. Elsewhere,  U.S.-China trade talks were taking up a large portion of the market noise while both Politico and CNBC reported that the two sides are nearing a deal, with an announcement possible as soon as next Friday.  

DJIA  levels

Technically, the index was dislodged from the pivot and extended its losses below the 20-4HR EMA and closed below the 20-D EMA. Stochastics are leaning bearish and a run back to test 26000 will be opening risk towards 25700s. A subsequent break of the 50-D SMA just below 26000 opens risk to the 23.6% Fibo retracement of the late Dec rally at 25500 guarding 25300 (200 D SMA). A break all the way down to the 24800 gap area would come into target ahead of the 24500s and then 50% of the upside run made at the end of Dec at 24150.