The day started with Pres. Trump saying that if Europe goes ahead with a tariff on whiskey, he would retaliate with a 200% tariff on wine, champagne, and alcohol. That got the markets attention as tariffs continue to be a feared item by traders. So although US PPI data was better than expectations, it was not able to turn the stock market around.

With the declines today that saw the

  • Dow Industrial average down -537.12 points or -1.30% at 40813.81.
  • S&P index down -77.81 points or -1.39% at 5521.49.
  • NASDAQ index down -345.44 points or -1.96% 17303.01
  • Russell 2000 down -32.77 points or -1.62% at 1993.69

The S&P index is now down -10.18% from it's all time high. The NASDAQ index is down -14.35%.

On the economic calendar initial claims came in near expectations 220K versus 225K estimate. The PPI came in at 0.0% versus 0.3% estimate. The ex food and energy was -0.1% lower than the 0.3% estimate (although the prior month was revised higher from 0.3% to 0.5%). Despite the tamer data from both CPI and PPI, the expectations from the number crunchers for the core PCE are still centered around -+0.3% given the details of the components included in the PCE data.

In the forex, the US dollar is ending higher versus most of the major currencies. Looking at the major currencies, the US dollar rose against all the major currencies with the exception of the JPY:

  • 🔼 0.34% versus the EUR
  • 🔼 0.12% versus the GBP
  • 🔽 -0.34% versus the JPY
  • 🔼 0.14% versus the CHF
  • 🔼 0.6% versus the AUD
  • 🔼 0.52% versus the NZD

Looking at some of the major currency pairs technicals:

  • EURUSD: The EURUSD defined it upside resistance against the 100 hour moving average 1.08732, and its support near the broken 61.8% retracement of the move down from the September 2024 high at 1.0817. The current price trades between those two levels at 1.0851. Traders will be looking for a break of either level with momentum to provide the next clue for the next move
  • GBPUSD. The GBPUSD found support buyers near its 100-hour moving average currently at 1.2929. The price is trading at 1.29506 going into the close. As long as the price remains above the 100 hour moving average and then lower support near 1.29065, the buyers are still in play (and more in control). Move below those levels, and traders will look toward the 200 hour moving average 1.28759.
  • USDJPY: Sellers against the 200 hour MA currently at 148.22 will provide an upside target for buyers and a resistance level for sellers into the new trading day. On the downside, the 100 hour MA at 147.72 would need to be broken and stay broken, to have traders looking toward the potential for another run to the lows from the move down at 146.53. Move above the 200 hour MA will have traders eyeing swing area resistance at 148.56 to 148.72.

In the US debt market, yields are ending the day lower:

  • 2 year yield 3.957%, -3.8 basis points
  • 5-year yield 4.026%, -5.1 basis points.
  • 10 year 4.268%, -4.8 point basis points
  • 30 year 4.588%, -4.3 basis points
Source: Forex Live