US stock indices had been pumping higher since the start of June, a large factor behind that was FOMC rate cut expectations.
The markets started to price interest rate cuts to come from the U.S. central bank.
Stocks were rising because a cut in interest rates is good for businesses, you are effectively bringing down costs for them.
Companies will be paying less interest on any outstanding credit on; business loans, property mortgages, machinery etc. This frees up some more cash for businesses and then they will likely pass those savings on the consumers, or reinvest to expand the business, perhaps by hiring more staff.
Dow Jones (US30) is trading within a huge supply region and top 26565-27000 range. Faltered here in October 2018 and April 2019. Given the FOMC may not live up to market expectations for rate cuts, this could be in for some selling. Worth keeping an eye on, this could provide very good opportunity for shorts. The next major area of demand is back down at where the recent rally started, 24,500 – 24,250 territory.
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