Dow Drops 82 Points Because That's What Happens After a 600 Point Gain
6:43 a.m. The Dow Jones Industrial Average’s three-day winning streak looks like it could be coming to an end Thursday morning, as oil prices drop below $50 a barrel and Treasury yields slide.
S&P 500 futures have declined 0.4%, while Dow futures have fallen 82 points, or 0.3%. Nasdaq Composite futures have dropped 0.6%.
Those moves are relatively small, and should e expected after the Dow gained more than 600 points following Federal Reserve Chair Jerome Powel’s dovish speech yesterday. More worrisome is the response of oil, which dropped 1.1% to $49.76, and in the 10-year Treasury yield, which briefly fell under 3% in overnight trading. And those moves could signal something darker-continued concerns about the global economy.
“Clearly, with the Fed thinking about slowing down their hiking schedule and the ECB expressing similar thoughts of delaying tightening in the Eurozone, a lower-than-previously-expected interest rates environment is positive for equities,” writes Konstantinos Anthis, head of research at ADSS. “However, the prospect of a slowing domestic performance in the U.S. and Europe and persisting trade concerns on a global level don’t allow for much optimism so we still remain on the defensive regarding the U.S. and European equity markets.”
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