FXStreet (Córdoba) – US stocks closed lower on Wednesday after Fed signaled worries about the economic outlook but did not ruled out further rate hikes.
The Federal Reserve left its policy unchanged while acknowledging the recent turbulence in markets and said they are “closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook.”
Despite a dovish tone and an on-hold stance were largely priced in by investors, the statement triggered doubts over how many and the timing of the possible future rate hikes.
Indexes were trading higher but turned lower after the FOMC statement. The DJIA lost 222 points or 1.34% to end at 15,944.56, while the Nasdaq shed 3.18% and the S&P declined 1.09%.
DJIA technical view
“From a technical perspective, the Dow daily chart shows that, as many other major indexes, the advance stalled around a sharply bearish 20 SMA, while the Momentum indicator failed to overcome its mid-line and turned south, and the RSI resumed its decline, now around 37”, said Valeria Bednarik, chief analyst at FXStreet. “In the shorter term and according to the 4 hours chart, the index is currently developing below its 20 SMA, while the technical indicators present tepid bearish slopes below their mid-lines, lacking directional strength, but maintaining the risk towards the downside.”
(Market News Provided by FXstreet)