Key Points:

• Index dropped over 400 points intraday before stabilising near lows.
• MACD showed strong bearish momentum; no signs of bullish crossover yet.
• Price action remains below all major short-term moving averages.

The Dow Jones extended its decline in early Wednesday trade, touching a low of 41,781.15 as traders reacted to the looming passage of President Trump’s sweeping tax and spending bill. The chart shows a clear downtrend leading into the New York open, with sharp selling pressure breaking through short-term moving averages. The 15-minute MACD confirmed the move with a deep bearish crossover early in the session.

The selling was exacerbated by a jump in Treasury yields, particularly the 10-year benchmark, which briefly climbed above 4.59% before easing to 4.57%. Fears that Trump’s proposed tax cuts and spending splurge could worsen the fiscal outlook drove the yield spike and put pressure on equities.

Technical Analysis

The Dow Jones (DJ30) saw persistent intraday selling pressure, sliding steadily from the opening at 41812.0 to reach a session low of 41781.15, where it found brief support. The bearish bias dominated the early session, with moving averages (5, 10, 30) aligning in a clear downward slope before eventually flattening during a late-period consolidation. The MACD histogram initially extended deep into bearish territory, but the histogram bars have since moderated, and a possible bullish crossover is forming, suggesting the selling momentum may be losing steam.

Picture: DJ30 grinds lower to 41781 before flattening; early MACD reversal hints at stalling bearish momentum, as seen on the VT Markets app

However, price action remains weak with no meaningful bounce from intraday lows, and the index is pinned below short-term moving averages. A break above 41900 could signal mild recovery, while failure to hold above 41780 may reintroduce downward pressure. Until volatility returns, consolidation appears likely near current levels.

Cautious Forecast

Meanwhile, futures stabilised slightly in the premarket, with Dow E-minis trading down 49 points. The Nasdaq and S&P 500 fared better, buoyed by tech and crypto-related gains, though overall market breadth remains cautious.

Looking ahead, attention shifts to Fed commentary, weekly jobless claims, and PMI releases—all of which could either deepen concerns or provide relief. But with the Dow unable to reclaim 42,000, technical momentum remains bearish in the near term.

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