Friday was another bad day for the US stock market. Two key topics that are currently being discussed by many: the conflict between the United States over Ukraine and the location of NATO troops in Eastern Europe, as well as the increase in the Fed's interest rate. The American central bank will hold an emergency meeting today, during which they will discuss the ways to influence inflation, which rose to 7.5% by the end of January. Analysts do not believe that the rate will be raised today, but they note that discussion of this issue may lead to a faster and sharper rate increase in the future. The last time the Fed held an emergency meeting was on November 23, 2015, and a few weeks later, the rate was raised for the first time, and then 8 more times in the next three years. This cycle was marked by the largest drop in the S&P 500 index since the Great Depression.
Therefore, all indices and stocks can continue building a downward set of waves soon. It should also be noted that the geopolitical tension is rising, which is also a negative factor for stocks, indices, and not only American ones. This week, the US stock market may decline again.
NASDAQ Composite Index
The NASDAQ Composite fell by 439 points on Friday and closed at 14,279 points. A successful attempt to break through the level of 14525, which corresponds to 261.8% Fibonacci, indicates the willingness of investors to continue selling shares included in the index. The nearest downward target is the level of 13724 – the previous local low.
Standard & Poor's 500 index
On Friday, the Standard & Poor's 500 Index dropped 84 points and closed at 4423. Two failed attempts to break through the level of 4586, which corresponds to 200.0% on the upper Fibonacci grid, led to new sales of the instrument. However, the news background has now a huge impact on investors' sentiment, but the wave marking also indicates a more preferable decline in the instrument.
Dow Jones index
The Dow Jones index suffers the least from geopolitical twists and turns and intensifying panic around the Fed's interest rate hike. They declined by 525 points last Friday, but the picture shows that its correction waves are the smallest compared with other instruments.
Tesla
Tesla shares declined by $48. A successful attempt to break through the level of $891 indicates that the market is ready for new sales of Elon Musk shares with a target located near $783, which corresponds to 50.0% Fibonacci. However, as in the case of indices, the news background can lead to a much stronger fall.
Microsoft
Microsoft stock may also continue to decline after failing to break through the level of $314, which equates to 50.0% Fibonacci. The nearest target is $280. If it is reached, it will mean that the company's shares have fallen in price by almost $100 in just a few months.
Apple
Apple shares feel most confident in the coming crisis. Its value only declined by $3.6 at the end of the past week, but the instrument is also preparing to decline to its previous low, which is set at around $155.
Oil
Oil is the only instrument supported by geopolitical concerns. Last Friday, oil's price surged to $94 per barrel, after a successful attempt to break through the level of $91.64, which corresponds to 127.2% Fibonacci.