US Stocks Fall on Apple Hiring & Spending News

We’ve seen a mixed start for equities across the European open on Tuesday. While the current correction lower in USD is broadly supportive of risk appetite, there are still offsetting factors stopping equities markets from taking full advantage of a softer US Dollar.

US stock markets slipped lower yesterday, giving back initial gains, in response to news that Apple plans to scale back spending and hiring into 2023. This comes on the back of similar news recently from other leading tech firms such as Meta Platforms and Tesla, and has been taken as the latest warning sign over the projected health of the US economy. With recession fears building on the horizon later in the year, the tech sector is likely to be among the worst hit from any slowdown, hence these defensive moves we are seeing.

Indeed, while the US Dollar is softening currently, expectations of further tightening from the Fed next week look set to create headwinds for equities traders. Ahead of the FOMC, we’ll have the July ECB meeting this week which is widely expected to see the bank hike rates for the first time in over a decade, adding to the wave of central bank tightening we are seeing.

Technical Views

DAX

The DAX continues to hold within the recent 12462.59 – 13067.45 range which has framed price action over July. The market is still holding also within the larger bear channel, keeping the focus on an eventual break lower, unless bulls can break back above the channel top, putting focus on 13672.31 next.

S&P 500

The market continues to hover below the 3910 resistance, following the rebound off the 3613.50 lows. With both MACD and RSI bullish, the focus is on a break higher here and a run up to the 4153.50 level next unless bears can drive price below the 3613.50 level.

FTSE

The FTSE is holding around the 7213.9 level currently, sitting about midway in the range between the 6990.4 and 7362.6 level. While both MACD and RSI are turned higher here, given the declines prior to the recent range, focus is on a break lower eventually with 6822.4 the broader target for bears unless bulls can break the upper range level near-term.

NIKKEI

The Nikkei continues to hold within the large falling wedge pattern which has framed price action recently. The market has been grinding higher off the 25595.3 lows but is yet to break the 27422.9 level. While this level holds as resistance, further ranging action is expected.