DJIA and S&P trim losses, Nasdaq falters on biotech

US indexes bounced, but ended off their daily lows on modestly higher yields.
Fears that rising inflation will hurt companies' profits spook bulls.

US indexes closed mixed, although the Dow Jones and the S&P trimmed their Wednesday losses. The DJIA added 164 points and closed at 24,962.48, while the S&P added 0.10%, to finish at 2,703.96. The Nasdaq, on the other hand, closed in the red, down 0.11% or 8 points at 7,210.09, undermined by the biotech sector. Despite closing up, the DJIA is well off its daily high, at mid-US session the index was over 300 points higher.

US Treasury yields were stable this Thursday, hovering between small gains and losses all through the day. The yield for the 10-year note settled at 2.92%, up from its previous close of 2.90%, the reason why indexes pulled back from their early highs, as ever since the NFP release earlier this month, equities traders fear that rising inflation and interest rates will result in higher borrowing costs, offsetting the benefits of lower taxes.

Technical outlook

The Dow's daily chart shows that, despite recovering ground, the index was once again unable to establish itself above a bearish 20 SMA, hovering around it at the end of the day, but also that buying interest continues defending ground around the 61.8% retracement of the previous week's slump and the 100 DMA. The Momentum indicator in the mentioned chart has lost upward strength after entering positive territory, while the RSI hovers around 47 with no clear directional strength, indicating that bulls are still hesitating about pushing it higher. Shorter term, and according to the 4 hours chart, the index presents a neutral stance, as its struggling around its 20 and 100 SMAs, both within a well-limited range and heading lower, while technical indicators turned flat around their mid-lines.

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