NASDAQ 100, Dow and DAX sink as geopolitical tensions hit markets
Developments on the 1000th day of the Russia-Ukraine war prompted a risk off move across markets, knocking back indices in Europe and the US.
Geopolitical tensions have driven losses across stock markets today, wiping out some tentative overnight gains for European and US markets.
Ukraine has taken advantage of President Biden’s decision to allow it to use US-supplied missiles against targets inside Russia, hitting at least one target. This has brought a response from Moscow in the form of an updated nuclear doctrine, which allows for the use of nuclear weapons against other countries and their allies in response to a conventional attack.
This sabre-ratting prompted a classic flight-to-safety move across markets, driving stocks lower, lifting the US dollar but also bolstering gold prices.
As the US session gets underway, traders will be watching to see if the losses intensify or whether buyers may enter.
NASDAQ 100
Losses have been limited here, but the bounce from the previous two sessions has stalled in its tracks. Last week’s NASDAQ 100 low around 20,300 has not been broken, but a close below this might suggest a new push back to the pre-election low around 20,000.
Conversely, if the buyers step up and the index holds above 20,300 then we may yet see a recovery and a push back to the highs of last week.
NDX chart
Dow Jones
The post-election bounce continues to unwind, with the Dow Jones index dropping back below 43,000 in pre-open trading. As with the NASDAQ 100, the pre-election low below 42,000 could provide the initial destination for any continued weakness. A recovery back above the October highs of 43,300 would help to suggest that a low has formed.
Dow chart
DAX 40
The DAX 40 has continued its poor run from the October highs, having notched up several lower highs over the last month.
A close below 19,000, previously support, would open the way to more substantial losses, targeting the September low around 18,250. This would leave the uptrend intact however. In the short-term, a recovery back above 19,000 might indicate some buying momentum has re-emerged.
DAX chart
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