Stock Prices Feel the Impact of Fed Chair’s Speech

The Dow Jones took a sharp slide on Monday, as well as Nasdaq and the S&P 500. The stock market has begun another significant trajectory of loss this week in reaction to the statement from the Federal Reserve’s Chairman. Jerome Powell said, on Friday, that pain is required to bring inflation down.

Top Indexes are Capitulating

The leading indexes in the economy sold out on Friday as they moved back in the direction of the 50-period daily moving average. A lot of shares that showed purchasing signs as of Thursday fell again on Friday. Some of them, however, did not.

Investors need to exhibit some caution while they add more exposure when the market is in retreat. Those investors might need to stay back a bit if they had too much exposure or purchased extensive shares in the past few days.

Nevertheless, the pain that the market is undergoing might be setting the stage for better opportunities and bigger gains. Some shares are already forming different handles while some others are working on bases that might be going in the direction of bullish fallbacks.

Arista Network and Apple are examples of shares that formed handles during fallbacks recently. Both are, however, not very extensive from major moving averages. But Tesla is currently trading at some significant levels.

Steel Dynamics and ACLS have found themselves on the IBD leaderboard. Tesla and ANET are also on the IBD list. While STLD and Arista are present on Big Cap 20.

Impressive Activities on Chinese Stock

While at that, Chinese shares Baidu, Nio, BYD, Li Auto, and Pinduoduo are the focus of traders and analysts with major news. Chinese stocks listed in the United States had a bounce on Thursday, and some were quite strong. This came on the back of news that an auditing agreement between the US and China was drawing close.

The first stage of the agreement that was confirmed on Friday reduced the fears and possibility of delisting in the US. Baidu and Pinduoduo share especially displayed bullish activities. However, their earnings were on tap.

Pinduoduo shares further rose early on Monday due to high results. While Nio, BYD, and Li Auto, which are close rivals of Tesla, need to gather more momentum but they are worth watching out for.