Stocks in the US moved sharply lower over the course of the trading session on Monday, adding to the steep losses posted last week. The major averages slid firmly into negative territory, with the Dow Jones tumbling 400 points. The sell-off came amid lingering concerns about the outlook for the global economy along with uncertainty about the potential for a trade deal between the US and China with Vice President Mike Pence stating the US would not back down until China changes its ways. The warning dampened investor hopes for a break in US-Chinese trade relations ahead of the G20 summit later this month in Argentina. Negative sentiment was also generated after the Wall Street Journal said Apple slashed production orders for all three of the iPhone models that were unveiled in September. Trading on Tuesday may be impacted by reaction to the latest corporate earnings news and the report on new residential construction in the month of October due later today.
The Dow Jones confirmed its breakout through the previous session low and kept making lower lows throughout the whole session yesterday. After trading down to 24900 earlier during the day, the index bounced off back above the key technical support level at 25000 closing slightly above it. The failure to close below this level could increase that levels importance as support going forward. The Dow however closed back below the 200-day moving average at 25097 confirming that the short and medium-term trends both turned bearish.
Support: 25000 / 24355
Resistance: 25275 / 25555