Volatility in the U.S. Stock Market

On Wednesday, the stock market in the United States exhibited a juxtaposition of gains and losses across the three major indices, reflecting a continued struggle for direction amidst a turbulent atmosphereWhile the Dow Jones and S&P 500 indices hovered just below their recent peaks, experiencing only slight fluctuations, the Nasdaq Composite formed a symmetrical triangle pattern, oscillating within a midrangeThis steadiness indicates an impasse, with neither the bulls nor bears managing to secure decisive momentum.

The Philadelphia Semiconductor Index, known for its volatile nature, has been trapped within a similar symmetrical triangle, frequently retracing just when it looks poised to breach either resistance or supportCurrently, the index is caught in a sideways consolidation pattern above its support levels, leaving its future trajectory uncertain as traders weigh their options amidst fluctuating market reactions.

Meanwhile, the Nasdaq Golden Dragon Index, which primarily tracks Chinese stocks listed in the U.S., has recently been fluctuating in a narrow rangeAfter breaking past a critical resistance level in the prior session, it quickly dipped back, indicating that traders are still testing the watersHowever, the index showed a renewed upward momentum on this day, positioning itself to reclaim the highs achieved earlier.

In contrast, the S&P Real Estate and S&P Biotech sectors had exhibited rebounds during their recent downturns but found it challenging to build on those gainsThe biotech index remains for the most part within a constricted range, whilst the real estate sector is bouncing up but has breached its bullish trend line today, leaving market participants questioning whether a significant trend shift is underway.

Gold has been setting a positive tone, experiencing a significant surge that has propelled it to new highs, alongside a movement into an ascending channel that nears its own resistance levels

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However, silver continues to struggle beneath its previous peaks, exhibiting a lack of forward motion that has left investors cautious despite overall positive trends in precious metals.

Crude oil futures and related energy sectors have recently encountered a pullback after a short rally, only to regain some footing as the market indicated signals of a potential reversalYet, a sudden plunge today has seen prices retract back to support levels, sparking concern that a breakpoint could lead to further declines, potentially revisiting previous lows.

Towards the closing hours of the trading session, there was a wave of selling pressure that gripped the U.S. stock marketThis sell-off was ignited by a consumer inflation report that exceeded expectations, leading to overwhelming reactions from tradersAs a result, the Dow had a closing downturn of 0.5%, with the S&P 500 tapering its losses to land at 0.3%. Interestingly, the Nasdaq managed to assert itself above the critical 50-day moving average, despite the index having dropped nearly 1.2% earlier in the day, showcasing resilience in the face of market uncertainty.

In the realm of stock activity, the NYSE saw an uptick in trading volume while the Nasdaq experienced a dip compared to the previous dayThe down-to-up ratio on the NYSE finished at an alarming 13:5, in stark contrast to the Nasdaq's 9:7 ratio.

In Treasury news, the yield on the benchmark 10-year U.STreasury bond surged significantly, climbing 10 basis points to 4.636%, marking the largest one-day gain since mid-DecemberThis shakeup was attributed to heightened interest following the release of a higher-than-expected consumer price index that sent investors pouring into U.S. debt instruments.

In additional economic developments, the new administration in the U.S. is reportedly considering exemptions on reciprocal tariffs for four categories, including imported automobiles and pharmaceuticals, a move that could have far-reaching implications on trade and pricing.

Looking at tech giants, stocks such as Nvidia, Apple, and Microsoft remain below their 50-day moving averages, whereas Amazon is hovering just above that mark

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Apple made an impressive recovery, spiking by 1.6% during the day's trading.

Meta Platforms continued its upward trend, capitalizing on the momentum gained after its stock crossed a significant entry pointConversely, Nvidia faced a decline of 1.4% following updates about its StargateAI project, but Micron saw its shares increase as well.

In corporate highlights, Alibaba has broken out from a cup-and-handle setup, witnessing its stock climb for five consecutive days, with volumes soaring over 150% compared to its averageThis ascent follows a breakthrough above the handle price of $103.67.

Not to be overlooked, BYD, a dominant competitor to Tesla, witnessed a dramatic rise of 7.9%, closing at $45.77, establishing its historical high following a bold entry from a buy point of $42. This surge is fueled by the company's recent implementation of a free driver-assistance feature in its expansive product lineup, amplifying competitive pressures on Tesla and local rivals.

The consumer price index (CPI) report indicated a a higher-than-anticipated inflation rate, with prices increasing by 0.5% month-over-month and rising 3% year-over-yearCore inflation, which excludes food and energy, climbed 0.4%, exceeding the forecasted 0.3%. The yearly core inflation now stands at 3.3%, compared to the expected 3.1%, underscoring the persistent inflationary dynamics in the economy.

Fed Chair Jerome Powell continued to testify before Congress, noting that the inflation levels reported in January do not significantly alter the overall outlook, asserting that the economy remains “close but not at” the inflation target set by the Federal Reserve.

On the day prior, Powell made it clear that the Federal Reserve is in no hurry to implement rate cuts

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