Wall Street benchmarks end with modest gains ahead of the Fed

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  • The S&P 500 added around 8 points, or 0.3%, to end near 3,006.
  • DJIA, climbed around 31 points, or 0.1%, to end near 27,108.
  • The Nasdaq Composite ended near 8,186, adding 32 points, or 0.4%. 

Wall Street benchmarks ended with modest gains Tuesday while investors get set for the Federal Reserve interest rate decision this week where a rate cut is already fully priced in. The Dow Jones Industrial Average, DJIA, climbed around 31 points, or 0.1%, to end near 27,108. The S&P 500 added around 8 points, or 0.3%, to end near 3,006. The Nasdaq Composite ended near 8,186, adding 32 points, or 0.4%. 

An ‘initial’ trade agreement between the US and Japan has been agreed

“Trump advised Congress that this initial deal would be signed in the coming weeks. Details are yet to be released as to what this deal entails but agriculture products are expected to feature. There is also a glimmer of hope US relations with China will improve. Trade delegates will return to the negotiating table on Thursday for their 13th round of talks. Soybean exports to China have resumed with the USDA advising yesterday 260,000 tonnes of soybeans have been sold to China this month,” analysts at ANZ Bank explained. 

US data

US industrial production lifted 0.6% in August, its largest jump in over a year, with the manufacturing sub-index up 0.5%:

“This result was considerably better than expected and will provide the Fed Reserve with something to mull over as they discuss rate cuts this week. Fed Governor Powell previously stated ‘a slowdown in manufacturing did not send a clear signal to the Fed’s rate-setting committee’ but this data does provide further evidence that the Fed doesn’t need to aggressively cut rates. Capacity utilisation data was also positive lifting to 77.9%, and outperforming market expectations,”

analysts ANZ explained.

DJIA levels

Bulls could be out of luck at this juncture if obeying the bearish doji candle formation through the 27200s and should the risk profile of markets continue to deteriorate, bears can target the 21-DMA, the 50 and then the 200 DMA. Further below lies the May and Jun lows in the 24700s as a double-bottom target.

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