Wall Street resumes downward move amid recession fears, despite solid performance of banking and aviation sectors
US500 fell sharply in the last few minutes as recent economic data weighed on market sentiment. The Richmond Fed Index has dropped to the lowest levels since the pandemic, while consumer sentiment, according to the Conference Board, hits lowest level since February 2021, while the expectations index plunged to level not seen since 2013. More and more people indicate that the Fed wants to use the tool of "controlled" recession to stop rising inflation.
The S&P 500 index erased early gains and is currently losing more than 1%. At the beginning of the session major US indices were trading in green mostly thanks to strong rebound of the banking sector. Banks raised their dividends after passing their annual stress tests. In addition, airlines also bounced back due to the fact that China is reducing travel restrictions. The quarantine is to last 10 days and has been shortened from 3 weeks.
US500 bounced from the resistance zone which consists of 100 SMA and 200 SMA. The S&P 500 previously completed a reverse head and shoulders pattern and now we may be dealing with a short term double top formation. Source: xStation5