US Yields explode, dampening Investor sentiment – Dow Jones and US Stock Market Outlook

• US Stock Benchmarks are struggling once again after faking out higher yesterday, as post-FOMC Market flows extend
• With the latest change in dynamics for US Treasuries, risk-assets dive lower
• Exploring Technical Levels for the Dow Jones, Nasdaq and S&P 500

Today is providing yet another leg of renewed inflation fears, and this is not boding well for global assets.

Yesterday's address by Israeli PM Netanyahu raised hopes for a shorter-than-expected conflict, leading to major dumping in the US Dollar and WTI Oil. Still, this narrative quickly took a significant U-turn.

President Trump's latest pledge to militarily intervene in the Strait of Hormuz came with a surprise: a repricing of a now much longer US-Iran conflict to achieve more optimistic results.

The new idea arises from the US Army's plan to capture Kharg Island, Iran's largest Energy production site, to pressure the IRGC into reopening the Strait of Hormuz.

The issue, however, is the fact that this would require boots on the ground, and sources familiar with the issue pointed to at least a month extra of strikes to weaken the Islamic regime further.

As Fed's Waller pointed out in a first post-FOMC interview, the issue is that a longer conflict poses the risk to disanchor inflation expectations, and this is what got the Rates Market to blow up this morning. Any hopes for rate cuts are now long gone.

US yields are up significantly in this morning's action, implying higher inflation ahead and even potential rate hikes: The US 2-Year yield is now at 3.90% (while the current Fed Funds is at 3.75%).

The issue here is that Stock Markets, particularly when the economy begins to decelerate, can be largely disrupted by higher yields and costs.

But inflation may have to come first in the event of a longer conflict, to avoid not only job losses but also further erosion of the US Dollar's buying power.

Bond vigilantes, not liking the idea of a longer conflict, and selling Treasuries, indicate this discontent. The repricing to higher rates will weigh on risk assets for the time being.

At least, the US Dollar used this to recover most of its past session's move – What a fakeout!

With Oil prices and the US Dollar decoupling since the FOMC meeting, both will now need to be tracked individually to spot where the Market wants to go.

The 4H 50-period MA on the Dollar Index will serve as a major indicator of upcoming action.

Extending above it would hurt Sentiment even further. Rejecting it, however, may soothe the selloff in Stock Markets a bit more – But don't expect to see much clarity before the end of the weekend.

Let's spot how this translates into Stock Markets by diving in today’s mid-session charts and trading levels for the major US indexes: the Dow Jones, Nasdaq, and S&P 500.

Read More:

• Metals dive lower from the global Hawkish repricings, Opportunity or Trap? – Silver (XAG/USD) and Gold (XAU/USD) Outlook
• Chart alert: Watch 157.40 on USD/JPY, hawkish BoJ, ECB and BoE ignite yen strength
• The US Dollar dives after the FOMC, long-term reversal incoming? – Dollar Index (DXY) outlook

Once again, the Energy sector is the only survivor of this daily bloodshed, with Tech and Utilities being the largest victims of the explosion in Yields.

The DJIA is back at its previous session lows, right in the key 45,700 August 2025 Support.

Bouncing from here will be mandatory to hope for a more concise rebound, because the 50,000 level now looks far gone.

Today will probably not be the day to see a breakout either to the upside or downside, when considering the huge doji candle – As long as Yields remain higher, the downside does take the upper hand.

For an upside breakout however, investors will want to see a break and 1H close above 46,012.

Dow Jones technical levels for trading:

Resistance Levels

• 46,012 Doji Highs (short-term bullish above)
• March 8 War lows Pivot 46,300
• Resistance 47,000 +/- 100 Points (Channel top)
• Pivotal Resistance 47,500 to 47,650
• Key Resistance at 48,000
• 48,400 to 48,500 mini-resistance

Support Levels

• 45,700 to 45,900 August Support & Channel Lows) – Bearish below
• August highs 45,715
• 45,000 psychological level (Main Support on higher timeframe)

Nasdaq is now breaking its solid range, particularly hurt by the higher yields – Bulls did make an attempt to return back around the 24,150 Support Zone, but bears are taking the upper hand.

Except for much better sentiment after the weekend, expect to see a test of the 23,800 Support Zone.

Nasdaq technical levels of interest:

Resistance Levels

• 24,300 Session highs, range holds above (low odds)
• 24,450 to 25,550 Range Pivot (short-term resistance)
• Mini-intraday Resistance 24,750
• Key Resistance 25,000 to 25,200 (Range highs – Long-term Bullish above)

Support Levels

• February Support 24,150 to 24,200 (Testing, bearish below)
• October - November Support 23,800 to 24,000
• Early 2025 ATH at 22,000 to 22,229 Support

The S&P 500 broke its previous session's double bottom – But dip buyers have not said their last word.

The outlook looks fragile, but rebounding here will be required for a return to 6,700, as the S&P 500 is now evolving within a Bear Channel.

Look at today's highs (6,600) and lows (6,540) – Above will hold the bull channel, below will mark a further correction back towards 6,500.

S&P 500 technical levels of interest:

Resistance Levels

• Session highs 6,600
• Momentum Pivot 6,640
• 6,680 to 6,700 Mini-resistance
• 6,740 Key intraday resistance
• Pivotal Resistance 6,770 to 6,800

Support Levels

• Session lows (6,540)
• 6,490 to 6,512 October lows Immediate Support
• 6,400 Major psychological support

Safe Trades and Keep track of WTI prices, Yields, and the US Dollar!

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