CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Dow and Nasdaq plummet despite 0.5% Fed rate cut

Retail bias shifts back to majority long in both, remains heavy long in the DAX.

Dow Technical analysis, overview, strategies, and levels

After surging on Tuesday, it was a question of whether the Dow could register another green session especially with expectations of further monetary and fiscal easing to aid the economy in the current tested economic climate. Despite the US Federal Reserve’s (Fed) surprise 0.5% rate cut, the net result was a finish lower. Only Coca-Cola finished in the green, the rest in the red with American Express at the bottom. That meant overall US sector performance showed all sectors closing in the red, tech leading the losses followed by financials and communications. Data yesterday was light, but this evening we've got services PMIs (Purchasing Managers Index) for both Markit and ISM (Institute for Supply Management), as well as ADP's (Automatic Data Processing) non-farm estimate ahead of this Friday's official figures.

IG client* and CoT sentiment for Dow

In sentiment, retail bias has shifted back to majority long, standing at 58%.

Dow chart with retail and institutional sentiment

Nasdaq Technical analysis, overview, strategies, and levels

Risk-related flows despite a Fed rate cut meant that both Dow and Nasdaq were in for a similar red session, though the Nasdaq was the relative underperformer as tech stocks suffered significantly. Amongst its components there were a few outperformers including eBay and Tesla, with nearly the rest in the red with Marriott at the very bottom down 7%. While it’s possible the market may start to find a range to settle into, the overview remains volatile, its price crossing back below its 100-day moving average yesterday.

IG client* and CoT sentiment for Nasdaq

Retail bias here has also shifted from majority short, and currently at a slight majority long 53% as of this morning.

Nasdaq chart with retail and institutional sentiment

DAX Technical analysis, overview, strategies, and levels

Compared to US indices' Dow and Nasdaq, the German DAX's price drop was relatively limiting, as it enjoyed a smaller recovery when the Dow and Nasdaq partially recovered earlier in the week. As for its components, most were in the green before the close but suffering more so this morning. German services PMI will be released today, though in the context of the current risk-related atmosphere it will likely be of little impact unless the figure veers significantly off its expectations.

IG client* and CoT sentiment for DAX

In sentiment, the lack of retracement back up has meant that retail bias remains in heavy long territory, with the plummet taking that bias up a notch to a majority buy 66%.

DAX chart with retail and institutional sentiment

*The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am.

Be sure to request IG’s Weekly & Daily Market Report when you open an account with IG Dubai and get access to the full information on the FX majors, commodities, indices, and Bitcoin.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Keep an eye on FOMC opportunity

Find out how FOMC meetings can affect the markets ahead of the next one on 27-28 April 2021.

  • How might the next Fed meeting impact your trading?
  • What was decided at the last Fed meeting?
  • How does the FOMC announcement usually affect the dollar?

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.