In mid-week trade, the Dow Jones (DJI), S&P 500 (SPY), and Nasdaq (QQQ) gave up much of their rally. By midday, bullish trading pulled back.
Investors might blame profit-taking, threats of the U.S. taking Greenland, or a drop in technology stocks for the reversal. Regardless of the reasons, watch out for bearishness in the aerospace and defense sector, railroads, and farm and heavy machinery.
Aerospace and defense stocks pulled back after Trump warned firms to cut back on share buybacks and dividends. This interference is highly unusual. At best, the Securities and Exchange Commission would play the role of guiding on executive compensation and shareholder distributions.
Lockheed Martin (LMT), General Dynamics (GD), RTX (RTX), and Northrop Grumman erased their intraday rally.
Farming equipment firm Caterpillar and Deere (DE) are some of the firms that risk reversing their uptrend. The real-world economy risks slowing down this year. Corporations are spending heavily on artificial intelligence solutions. They are afraid of falling behind the competition. That hurts demand in traditional sectors like farming.
Railroad firms like Union Pacific (UNP) and CSX Corp. (CSX) declined on Wednesday. Fears that the economy would slow down in the first quarter would hurt railroad firms.
In the consumer discretionary space, Procter and Gamble (PG) continued to drift lower. Pepsi (PEP) and Coca-Cola (KO) are also pulling back. At these levels, buyers might step in to start a position.
