Wall Street rallies in risk on environment ahead of Fed
- Wall Street rallied in a risk on environment ahead of the Federal Reserve (Fed).
- Nasdaq Composite Index COMP added 108.86 points, or 1.4%, at 7,953.88.
- The Dow Jones Industrial Average DJIA, +1.35% rose 353.01 points, or 1.4%, at 26,465.54.
- The S&P 500 index added 28.08 points, or 1%, at 2,917.75.
The U.S. benchmarks rallied on Tuesday, bolstered by the optimism of a trade deal between the US and China as well as prospects for easier monetary policy in both Europe and the US. The S&P 500 closed within 1% of its record close on April 30 at 2.945.83. The finish for all three benchmarks represented the highest closes since at least May 7th. The Dow Jones Industrial Average DJIA, +1.35% rose 353.01 points, or 1.4%, at 26,465.54, putting the benchmark within 1.4% of its Oct. 3 all-time closing high. The S&P 500 index added 28.08 points, or 1%, at 2,917.75, placing the index within 1% of its April 30 record at 2,945.83, while the Nasdaq Composite Index COMP added 108.86 points, or 1.4%, at 7,953.88.
Analysts at ANZ Bank noted that the US May housing starts fell 0.9% m/m vs expectations of a 0.3% gain. "However, the April release was revised up, leaving the aggregate level as expected. Housing demand has shown some signs of benefitting from lower interest rates recently but concern over higher tariffs on building imports from China has dampened sentiment amongst home builders."
The technical outlook for the DJIA has switched to bullish again following a number of sessions moving sideways and consolidating above the 61.8% Fibo retracement level of April to June swing highs and lows. The 78.6% mark in the 26200s with a confluence of the 12th April gap was a key upside objective which has been breached. Eyes can turn up towards 27000 psychological level. However, on the flip side, the 25200 level comes in around the 11th March swing lows. 25000 guards a run towards 24500s and then 50% of the upside run made at the end of Dec at 24150.
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