A continued rise in US bond yields for the 3rd straight session is hitting stocks on the Dow Jones Industrial Average. The Dow is 0.24% lower on the day, as funds move into the bond market and leave stocks floundering.
Furthermore, investors are refraining from making huge bets ahead of the release of the minutes of the FOMC meeting later today. Not even the better-than-expected retail sales data could prop the Dow up on the day. Rather, the investment flows into the bond market as a result of expectations that economic recovery could create inflationary pressures, is the major fundamental factor at play today.
Data released at 8.30 am showed a rise in the US Producer Price Index by 1.3%, which exceeded the market expectation of 0.2% and the previous figure of 0.1%.
However, a retracement in the price of the US Bond Yields (10-year) has capped losses on the Dow.
Technical Outlook for Dow Jones
Today’s decline has met support just above the 31282 support line, and buyers have forced a bounce from those levels. This allows the Dow to attempt another move towards new highs. Such a move has to take out 31730.
On the other hand, a further decline which takes out 31282 brings 30585 into the picture, with 30358 and 30101 serving as initial targets to the south.
Dow Jones Daily Chart