US indices hit fresh record highs during opening trade

Major US equity indices opened higher and knocked out fresh record highs as rallying crude oil prices boosted investor sentiment and spurred global risk-on rally. WTI crude oil rose for third straight session after Nigeria signaled optimism that OPEC will agree a supply-cut deal next week in Vienna, albeit has now retraced over $1.0 from session peak level of $49.20 and dipped into negative territory.

At the time of reporting, the Dow Jones Industrial Average gained over 50-points and touched 19,000 milestone, while the broader S&P 500 index rose around 5-points to hit 2,200 mark. Meanwhile, tech-heavy Nasdaq Composite added around 16-points and jumped to 5,385. 

Following Donald Trump's surprise victory in the US presidential election, markets started pricing-in aggressive fiscal spending by Trump administration, which sparked a broad based rally in the US equity market. Adding to this, US president-elect Trump has confirmed to withdraw from the Trans Pacific Partnership (TPP) on his first day in office gave investors another reason to cheer as the move is likely to bolster the fortunes of US business.

In other markets, the overall US Dollar Index continues to gain traction on growing expectations of an eventual Fed rate-hike action at its December meeting and is weighing on dollar-denominated commodities – like gold, which failed to build on to Monday’s recovery from over 5-1/2 month low touched last Friday.

Technical outlook

Carol Harmer, Founder at charmertradingacademy.com, notes, "If the S&P therefore does make a break higher above 2209 then we will see this continue to strengthen and we would be looking at 2225 as a viable short term targeted area...."

"If we fail to make a break this week we are going to see quitter a good retracement back towards the 2175 area...This is key...If lost a deeper correction would be evident with the 2160/55 support then evident...."

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