Dow Jones Industrial Average retreats further as Fed cut hopes fade

• Dow Jones extends its reversal as doubts about a June rate cut increase.
• US Factory Orders and JOLTS Job openings endorse the “no-landing” scenario for US the economy.
• The health sector is leading losses as Medicare rates have disappointed investors.

The main Wall Street indexes are going down for the second consecutive day on Tuesday. The Dow Jones Industrial Average (DJIA) is leading following strong US Factory Orders and JOLTS Jobs Opening data.

Orders for products manufactured in the US have increased 1.4% in February, following a 3.8% decline and beating expectations of a 1% increase. Beyond that, Job Openings have increased from 8.748 million to 8.756 million , above the 8.74 million expected by the markets.

The recent US data confirms the strong US economic outlook and a tight labor market, far from the ideal scenario to start lowering borrowing costs. This has left investors wondering about June’s rate cut, which sent US yields and the US Dollar higher while equities bled.

Dow Jones news

The Dow Jones Index declines 1.23% to 39,078 on Tuesday’s morning trade. The Health sector is leading losses with a 1.98% decline following reports that the Biden administration has failed to increase Medicare rates to the extent investors would have hoped.

The Consumer Discretionary sector drops 1.62%. Only the Energy and Utilities sectors are trading above opening levels with increases of 0.53% and  0.24%, respectively.

United Health Group (UNH) is the biggest loser on Tuesday with a 7.6% sell-off to $452.73. Next is Intel (INTC), trading 2.06% below opening levels to $43.60.

On the positive side, Dow Inc (DOW) advances 0.55% to $58.58 with Verizon Communications (VZ) up 0.4% to $42.45.
 

Dow Jones technical outlook

The technical picture shows the Dow Jones Index correcting lower with the broader bullish trend still intact. Price Action has broken the 50% Fibonacci retracement of the March rally, at 39,300, and is heading to the 39,000 support area. Further down, trendline support is at 38,835.

On the upside, the mentioned support at 39,300 might act as a resistance now and close the path toward the key area at 40,000.

DJIA 4-Hour Chart