Wall Street equity indices paused their record rally on Tuesday, with Dow Jones and the S&P 500 retreating modestly from all-time highs amid thin trading volume. There appeared to be lack of fresh catalysts overnight to fuel further gains after Monday’s rally, allowing stocks to consolidate. News crossed the wires that California is ready to fully remove the Covid-related restrictions on June 15th. This helped boost sentiment in the consumer sector, while the information technology sector was a clear lagger.
The IMF revised up this year’s global GDP forecast to 6.0% from an earlier estimate of 5.5%, saying that “even with high uncertainty about the path of the pandemic, a way out of this crisis is increasingly visible”. The agency has also upgraded growth forecasts for the US to 6.4% this year, driven by President Joe Biden’s fiscal stimulus bill as well as a rapid rollout of Covid vaccines.
The S&P 500 indexextended higher towards the ceiling of the “Ascending Channel”, which may serve as an immediate resistance level. The index has broken a psychological resistance level at 4,000, opening the door for further upside potential with an eye on 4,125. The overall trend remains bullish-biased as suggested by the upward-sloped moving averages. The MACD indicator is trending higher above the neutral midpoint, suggesting that bulls are still in control.