Dow Jones: US Stocks Turn Choppy on Fed Uncertainty, Tech Stocks Mixed

Stocks Turn Lower Mid-Session as Fed Chair Uncertainty Weighs

The major U.S. stock indexes are mostly lower heading into the mid-session on Friday. After a steady-to-better opening, the markets turned lower when President Trump floated the idea of nominating someone other than National Economic Council Director Kevin Hassett as the next Federal Reserve Chair. The news created enough uncertainty to encourage traders to lighten up on the long side.

Kevin Warsh Emerges as Front-Runner in Prediction Markets

Meanwhile, prediction markets have already moved former Fed Governor Kevin Warsh ahead in the race following the President’s remarks. Trump said, “I see Kevin’s (Hassett) in the audience, and I just want to thank you. You were fantastic on television today. I actually want to keep you where you are, if you want to know the truth.”

Stocks turned choppy first before moving lower.

Volatile Week Shaped by Trump Headlines and Iran Tensions

It looks as if traders are preparing to close out this volatile week on a down note. Traders hit the markets hard earlier in the week as Trump headlines and an escalation of violence in Iran encouraged investors to take profits and move to the sidelines. Trump even threatened military action against Iran before reversing his comments.

Taiwan Semiconductor Earnings and Trade Deal Fuel Thursday’s Rally

The indexes made a huge recovery on Thursday on the back of stellar earnings from Taiwan Semiconductor. Additionally, the U.S. and Taiwan reached a trade agreement in which Taiwanese chip and tech companies will invest at least $250 billion in production capacity in America, CNBC reported.

Sector Performance Mixed as Real Estate Leads on Lower Mortgage Rates

The major sectors are mixed, with six up and five down. The leader is real estate, up 0.79%. It’s followed by industrials, energy, financials, and technology. Materials is the largest loser, down 0.79%. We’re not seeing a real theme in the sectors, although a drop in mortgage rates is probably providing support for the real estate sector.

Honeywell and American Express Support Dow as Salesforce Weighs

Honeywell International (+2.39%) is providing support for the Dow Jones Industrials. This is followed by American Express (+1.99%) and International Business Machines (+1.75%). Salesforce (-1.95%) and Merck (-1.66%) are the biggest drags on the Dow.

Technical Picture: Dow Holds Near All-Time High with Key Support Below

Technically, the Dow Jones Industrial Average is edging lower, but it remains within striking distance of the all-time high at 49633.35. Taking out this level will reaffirm the uptrend. The nearest support is a minor pivot at 48743.20, followed by an uptrend line at 48639.00. If this fails as support, then sellers will set their sights on the 50-day moving average at 47978.16.

Market Outlook: Two-Sided Choppy Trade Expected Into the Close

Look for the indexes to continue their two-sided choppy trade unless all three turn higher late in the session.

More Information in our Economic Calendar.