The late sell-off in the blue chip index came as the 10-year U.S. Treasury yield jumped more than 4 basis points, or 0.04%, and crossed the 1.4% level in a delayed reaction to the latest numbers on inflation.
Inflation rose at its fastest pace in nearly 13 years, the Labor Department reported Tuesday. The consumer price index (CPI) increased 5.4% in June from a year ago; economists surveyed by Dow Jones expected a 5% gain. Core CPI, excluding food and energy, jumped 4.5%, the sharpest move for that measure since September 1991 and well above the estimate of 3.8%.
In other news, Dow component JPMorgan Chase lost 1.5% even after posting second-quarter earnings of $11.9 billion, or $3.78 per share. Another constituent, Goldman Sachs, edged lower by 1.2% after the firm reported second-quarter earnings of $15.02 per share, topping analysts’ expectation of $10.24 earnings per share. Additionally, Boeing fell about 4.2%, weighing on Dow sentiment.
Daily Swing Chart Technical Analyst
The main trend is up according to the daily swing chart, however, the formation of a closing price reversal top could threaten to shift momentum to the downside, leading to the start of a 2 to 3 day correction, or even a change in trend if the selling pressure is strong enough.
A trade through the intraday high at 34915 will signal a resumption of the uptrend, while a trade through 34004 will change the main trend to down.
A close under 34875 will form a closing price reversal top. If confirmed, momentum will shift to the downside, setting up the possibility of a 2 to 3 day break.
The minor range is 34004 to 34915. Its 50% level at 34460 is the first downside target. Since the main trend is up, buyers are likely to come in on a test of this level.
The short-term range is 32902 to 34915. If the main trend changes to down then look for the selling to possibly extend into its retracement zone at 33909 to 33671.